An era of tolerance demands a culture of compliance


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Last year when the Consumer Financial Protection Bureau (CFPB) announced temporary flexibilities for mortgage managers to deal with unprecedented volumes due to the impacts of the COVID-19 pandemic, many managers have taken advantage of these indulgences. However, a year later, with a new presidential administration in place, the CFPB puts these same mortgage agents in their sights.

First, let’s go back to spring 2020. The Bureau issued seven separate statements authorizing leniency in a number of areas, including quarterly reports, credit reports, billing error resolution times, reviews, surveillance activities, etc. For providers who did not have disaster protocols in place, the relaxed standards were like a gift from above.

A recent CFPB bulletin spoke directly to these providers. “Not being prepared is unacceptable,” he warned. “There is a tidal wave of distressed homeowners who will need the help of their mortgage agents over the next few months. There is no time to waste and no excuse for inaction.

While the return of strict compliance guidelines will impact some mortgage services, the TMS sub-service is ready to weather the storm, and for one simple reason: TMS’s compliance protocols have never been relaxed or compromised. . Neither will they ever be.

3 lines of defense
Since its creation, TMS subcontracting has developed and adhered to rigorous protocols. After all, the company was founded because there was no such rigorous service partner as the organization was internally. TMS standards have never been lowered due to the pandemic or anything else.

In fact, TMS began by instituting what is called 3 lines of defense or 3LOD. The three departments work together to ensure that TMS operates with structural integrity. From the start, it became clear that if TMS outsourcing was to be successful, going beyond the outsourcing status quo should be standard practice.

Row # 1: Business Unit Risk Management
The first line of defense is to establish quality assurance in each line of business. TMS’s culture of compliance is built into every inch of TMS operations. They perform regular testing, monitoring and reporting to immediately identify and eradicate potential problems early.

Line 2: Compliance testing and monitoring
Given the CFPB’s new stance towards mortgage agents, TMS’s second line of defense is particularly critical. This is crucial compliance work, starting with change management. Regulatory guidelines change often. This team monitors policy changes, communicates necessary protocol adjustments, and develops plans to ensure compliance. Once the changes are implemented, the compliance team comes back and performs testing to make sure the changes are working as intended.

Line # 3: Internal audit
The internal audit department uses a four-step process to identify irregularities. It challenges the effectiveness of all business processes and controls in the same way an outside organization would. Through proactive planning, a letter of commitment, on-site review and follow-up meetings, internal auditors independently assess the state of the business, identify areas for improvement and describe potential remediation activities .

At TMS, a culture of compliance and care is woven in and across all departments. Unlike some organizations that enforce in a limited role, the TMS compliance team is engaged every step of the way. In this sense, the renewed attention of the CFPB on service providers and their practices is good news. There is nothing to hide here.

Compliance in the future
The CFPB is committed to evaluating mortgage services according to several major criteria:

  • Be proactive
  • Working with clients
  • Respond to language issues
  • Fair income valuation
  • Process requests quickly
  • Prevent avoidable foreclosures

TMS Subservicing ticks all of these boxes with proven policies, procedures and processes. As waves of forbearance crashed on shore during a difficult year in 2020, TMS worked with its clients to find the best loss mitigation measures based on their unique situations. In addition, by stepping up instead of backtracking, TMS wait times in our customer service center were shorter than our competitors, and abstentions and delinquencies were kept below average. of the sector.

If they stay true to their word, the CFPB will soon be visiting many mortgage agents. TMS is prepared for this and always has been. By adhering to a culture of care, TMS stays true to internal compliance standards, whether or not there is a pandemic. If your subcontractor is not living up to their compliance, now has never been a better time to move to the industry standard.

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