Responsible Business Conduct: Self-Policing, Self-Reporting, Remediation, and Cooperation

The Consumer Financial Protection Bureau (CFPB or the Bureau) considers many factors in the exercise of its enforcement discretion. These include, for example: (1) the nature, extent, and severity of the violations identified; (2) the actual or potential harm from those violations; (3) whether there is a history of past violations; and (4) a party’s effectiveness in addressing violations. This guidance is being provided to inform those subject to the Bureau’s enforcement authority that in addition to these and other factors, there are activities they can engage in both before and after the conduct in question has occurred that the Bureau may favorably consider in exercising its enforcement discretion. Specifically, a party may proactively self-police for potential violations, promptly self-report to the Bureau when it identifies potential violations, quickly and completely remediate the harm resulting from violations, and affirmatively cooperate with any Bureau investigation above and beyond what is required. If a party meaningfully engages in these activities, which this bulletin refers to collectively as “responsible conduct,” it may favorably affect the ultimate resolution of a Bureau enforcement investigation.

As a result of the direction and encouragement provided by the CFPB in this publication, Control Solutions has developed a full complement of services designed to exemplify the spirit of “self-policing” and “cooperation” as defined by the CFPB. Control Solutions and its highly experienced industry and regulatory compliance professionals will help you identify your issues, develop a strategic plan to address them and help report them to the bureau in compliance with what they have described as “responsible business conduct”. The following list should not be considered all inclusive, but; more of a simplified offering for your mortgage compliance needs.

Pre- and Post-Close, GSE, FHA & Regulatory Quality Control

  •  Sample Selection (random, statistical, adverse)
  •  Data Integrity (Stress Testing Preparation)
  •  Policies& Procedures Compliance
  •  Credit& Compliance Guideline/Regulation Adherence
  •  Fraud Review
  •  Re-verifications
    • Comparing the loan file documentation to specified guideline requirements
    • Re-calculating LTV, CLTV, income, liabilities, and debt-to-income ratios (DTI) and comparing against guidelines.
    • Analyzing asset statements in order to determine that funds to close and reserves meet guidelines.
    • Confirming that credit scores (FICO) and credit histories meet guidelines.
    • Examining income, employment, assets, and occupancy status for reasonableness.

Non-Performing Compliance | Default Loan Review

  •  Compliance (GSE, FHA and Regulatory CFPB and OCC)
  •  Servicing Analysis
  •  Legal Document Review

Typically, the deliverables include any or all of the following components:

  • Loan Payment History: Examination of fee and cost for compliance with GSE and regulatory specification
  • Borrower Contact History: Analyze your collection and loss mitigation commentary for compliance with GSE and regulatory specifications.
  • Default \ Loss Mitigation Assessment: Assess your performance steps in communication and qualifying modifications and or liquidation strategies.
  • Legal Action Review: We review your loans in Bankruptcy, Foreclosure and Litigation for GSE, FHA and Regulatory compliance.
  • Escrow Advances: Review your current or pending loan level advances of escrow and other expenses.

Post Foreclosure Review \ Audit

Compliance ( GSE, FHA and Regulatory)

  • State specific compliance (fees and timelines)
  • Pre-foreclosure Loss mitigation compliance
  • SCRA Audit compliance
  • Bankruptcy and verification compliance
  • Notice and Service compliance
  • NPV Calculation verification and accuracy
  • Post foreclosure redemption compliance
  • Sale and eviction compliance
  • Judgment amount compliance