Preparing for CFPB: Information and Data Management

The good news is that the Consumer Financial Protection Bureau (CFPB) has made an exemption for companies that service 5,000 or fewer mortgage loans. However, for rest of the mortgage servicers subject to the bureau’s regulations are using these rule changes as an opportune time to overhaul their entire systems of data entry, rework internal procedures for loan approvals and reviews, and re-assess other areas of risk.

Control Solutions International understands that when it comes to regulatory compliance and the new federal regulations, financial institutions should be especially mindful of information management and data integrity.

Sophisticated information management systems can help with the complexity and challenges of completing the loan process through multiple phases and systems. However, those systems must to be able to effectively and appropriately track and maintain the required data in a format that can be review not only by the bank/mortgage company staff but also by the regulators.

Insuring the accuracy and consistency of stored data is often one of the biggest challenges for many loan servicing platforms. When loan files and histories were examined in the aftermath of the mortgage crisis there were deficiencies found in many areas including; document retention, loan history or activity logs, document imaging and execution. In many instances it was nearly impossible to understand the chain of events transpiring in the systems and furthermore even the decision-making processes.

In light of new regulations created, it’s especially important to ensure the accuracy of the loan file and maintain a comprehensive loan record that includes all signed legal documents, conversation logs and automated functions tracking.

Any automated systems will take some level of manual data entry or interaction on the part of the servicers whether it be in the process of scanning original document or the documentation of conversations had with the consumer and process triggers implemented by the servicers. There will always be an inherent risks associated to compliance as long as there is the possibility of human error in the equation.

A comprehensive information management system can be a great start to minimizing liability, however, until an organization conducts an “independent audit” of the information and data being managed, you could be leaving yourself open to undeserved scrutiny by one of the regulatory agencies. Conversely, by having an independent review preformed prior to a scheduled review, you can prepare and potentially even help to streamline that review with more accurate records and archived documents in a readily accessible format.

Loan servicers that make it a priority to stay current with technology and routinely preform independent reviews will be better equipped to adapt to this fundamental shift in how mortgage lending and servicing is done, and can expect to increase customer satisfaction and enhance profitability, all while minimizing risk.

That is exactly why the forward thinking leaders at Control Solutions International have put together a highly experienced team of professionals that have recently been working in conjunction with the CFPB to help you make sure you’re ready. Whether in preparing for a scheduled review or responding to a previous reviews, MOU or Consent Order. We have the recent and relevant experience to help you and your organization be successful in this very trying time. Please contact us for more information.