Compliance officers understand the challenges that loan servicing faces since the implementation of Dodd-Frank. Remaining knowledgeable with ever-changing regulations regarding RESPA, NFIP, TILA, GSO’s and the Joint Agencies has proven challenging for even the largest lenders.
In 2012 Miniter Group made a commitment to embrace our lenders’ new regulatory environment. We set out to create a pro-active compliance department to provide expert compliance advice to our lenders while monitoring all legislative and regulatory initiatives that will affect our lenders.
Our Compliance Department compiles information from our lenders regarding regulatory trends from examiners. This information is recorded in our knowledge base; whenever a regulatory trend is discovered, the information is disseminated to our lenders. We do this through email blasts, white papers and scheduled webinars.
During that situation, the timing of initial notifications and force-placement of flood insurance had many lenders scrutinized by their regulators.
The confusion created by regulators during flood zone map changes in first quarter of 2015 is an excellent example of the benefits of this process. During that situation, the timing of initial notifications and force-placement of flood insurance had many lenders scrutinized by their regulators. Interpretation by the regulators was not consistent between geographic regions. Miniter Group’s compliance department issued blast emails along with a series of white papers to help lenders address the situation with their regulators.
The Miniter compliance team also oversees our proprietary software development and execution of our Borrower-CentricSM workflows. They are responsible for pro-actively providing all Vendor Management documentation on a predetermined calendar to your compliance department with the guarantee you will meet your regulatory requirements.
We Know The Constraints You Face
We are here to work with you to develop and monitor your outsourced collateral risk transfer solutions. We welcome you to explore the compliance sections of our website. Download one of our compliance white papers if you choose. Click around and get to know us. With the exception of a few pictures of residential homes, all of the pictures on our website are from our headquarters in Rockland, MA.
Frequently Asked Questions
My borrower’s or member’s property has just been remapped into a Special Flood Hazard Area. What is the right way to handle this?
FDPA rules require you to send notice to your borrowers (or members in the case of credit unions) as soon as you become aware that the property is now in a SHFA. This notice begins the 45-day cycle before flood insurance must be in place. It is often a fairly straightforward process, but it can become complicated quickly by certain factors. For example, there might be existing flood insurance policies that are simply made insufficient by the change in the flood maps. When this happens, your institution should carefully weigh its options and its risks.
Should we force-place insurance on the last day of the notice cycle (the “45th day”) or the first day after it (the “46th day”)?
You may be surprised to know that you may place insurance as soon as the borrower’s flood policy has expired. Under the FDPA requirements, you may begin to charge the borrower immediately, but you will be responsible for refunding the borrower in the case of any overlapping coverage. Flood insurance must be in place no later than the 46th day, and best practices dictate that you delay the placement to avoid refunding premiums.
Our borrowers or members hate the language of the insurance lapse notice. May we simply rewrite it?
Legally, yes, but there is reason for pause before doing so. The CFPB’s rule on RESPA provides model forms, but there is no direct requirement to use them. Rather, the model forms provide an outline the CFPB has approved for providing the information that is required. As such, while you may depart from the model form, the model forms provide the only true guarantee that your notices will be found to comply with RESPA requirements. Even so, we have found there are ways to craft these notices so that they meet all the goals and requirements as detailed by RESPA in the most effective way possible.