Wells Fargo Finds Another 1.4 Million Unauthorized Accounts

WellsFargoWells Fargo employees may have potentially opened another 1.4 million fake accounts, putting the total number of fraudulent accounts at an estimated 3.5 million. The bank believes that  practice had been going on a lot longer than anticipated.

To address this controversy, Wells Fargo examined data going as far back as 2009 to determine the extent of unauthorized accounts. Refunds for the total pool of unauthorized accounts are estimated to be approximately $6 million, which is double the amount the bank originally estimated.

“We apologize to everyone who was harmed by unacceptable sales practices,” Wells Fargo CEO Timothy J. Sloan told the Washington Post. “We are working hard to ensure this never happens again and to build a better bank for the future.”

Upon hearing the news, Warren Buffet, one of Wells Fargo’s largest shareholders, told to CNBC, “When you put the focus on an organization that has hundreds of thousands of people working for it, you may very well find that it wasn’t just the one that misbehaved. And of course, it was more than one in the Wells Fargo case.”

Elizabeth Warren, who has been highly critical of the bank since the practice was discovered, remained steadfast in her call for consequence. She said, via Twitter, “The Federal Reserve should remove every Wells Fargo Board member who served during this scandal. I don’t know what they’re waiting for.”

In a recent interview, Sloan told DS News, “Clearly, right now at Wells Fargo, my job is to ensure we are all applying tremendous focus on making the changes necessary to help rebuild trust and always doing what is right for our customers. This is foundational to who we are and how we operate.”  a

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Keeping up with the CFPB

Puzzle Compliance RegulationThe Legal League 100 conducted a webinar Thursday afternoon to discuss changes in CFPB’s servicing rules. Three panelists joined in the discussion: Michelle Garcia Gilbert of Gilbert Garcia Group; Rose Marie Brook of Fabrizio & Brook, P.C.; and Stephen Hladik of Hladik, Onorato & Federman, LLP.

The webinar stressed the changes that CFPB has made to successor in interest rules, which were first put in place in 2013. A person is a successor in interest if the borrower transfers ownership by: transfering by will, inheritance, or operation of law; transfer to relative after borrower’s death; or transfer to spouse or child.

The rule determines proper order of operations and due diligence that servicers are required to take in order to remain in compliance when determining who is a successor in interest. First, servicers are required to respond to written requests if they include the name of the borrower and information to identify the loan. That response should include a clear description of documents the servicer requires to verify the identity of the successor in interest with return contact information. Servicers are not required to actively seek out successors in interest. These rules go into effect October 19, 2017.

Expert panelists also spoke on changes to federal bankruptcy rules and RESPA/FDCPA. The live contact and early intervention portion of the changes go into effect on October 19, 2017, and the requirement for servicers to provide periodic statements to borrowers in delinquency.

“Legal League 100 remains committed to education on mortgage industry developments and best practices ensuring that servicers and legal practitioners are equipped to serve homeowners,” said Derek Templeton, Executive Director of Legal League 100. “We are grateful to today’s distinguished panel for offering their collective expertise.”

Interested parties can find the presentation notes from the webinar here.

Legal League 100’s next event will be the Legal League 100 Servicer Summit, held on September 20, 2017 at the Five Star Conference and Expo in Dallas Texas. The event will take place from 7:30 a.m. to 3 p.m.

The 14th Annual Five Star Conference: Bringing Together Mortgage Professionals

Five Star Institute President & CEO Ed Delgado delivers opening remarks.

The mortgage industry will soon convene at the 14th annual Five Star Conference and Expo beginning Monday, September 18th and continuing through Wednesday, September 20th at the Hyatt Regency in Dallas, Texas.

The Five Star Conference and Expo is the largest mortgage servicing and real estate conference in the nation, with six academic labs presented by subject matter experts. Topics for the Five Star Labs include compliance, foreclosure, property management, REO, servicing, and investing.

“The talent level—the Bill Glasgow’s of the world, Marion McDougall from Caliber, PennyMac and Steve Bailey, every single panel is loaded,” said Wes Iseley, Senior Managing Director at Carrington Holding Company. “Compared to any other servicing conference, speakers here are of the highest quality. Attendees are going to hear directly from the people that are running these companies and servicing platforms.”

Tyler Smith, Wells Fargo VP of REO Asset Management and REO Lab Director, said in the current housing climate, his lab is an important one for agents who are interested in REO.

“Even though inventory is down, the focus on this area is as great as ever,” said Smith. “We’re expected to do things better and faster, so the real estate agent that’s going to continue to focus on REO needs to be aware of and truly understand the varying approaches that servicers are taking in this space.”

On the evening of Monday, September 18th, Five Star will honor veterans of the U.S. military with the annual Military Heroes Keys for Life event, which will include the presentation of five mortgage free homes to veterans and their families with the support of Operation Homefront, a national nonprofit whose mission is to build strong, stable, and secure military families.

“The Five Star Conference provides Operation Homefront with a unique platform to connect our mission with the mortgage industry,” said Operation Homefront President and CEO John I. Pray, Jr., Brig Gen, USAF (Ret). “We’re grateful to be part of this important [Keys For Life] program.”

In light of Hurricane Harvey, Five Star President and CEO Ed Delgado has also called an emergency meeting to take place at the Five Star. Among invited attendees are senior-level mortgage industry executives and federal officials. The goal of the meeting is to formulate responsive initiatives and an action plan to protect homeowners impacted by the wide-spread devastation of the storm.

“The Five Star has always been about bringing together leaders in the mortgage industry to discuss issues that are most impacting American Homeowners,” said Five Star President and CEO Ed Delgado. “The calling of policy meetings to discuss the impact of Hurricane Harvey is another extension of the way our industry comes together to protect the American Dream.”

The conference will conclude on the afternoon of September 20th with the Women in Housing Leadership Forum where women leaders in the mortgage industry will deliver inspiring keynotes on promoting inclusion throughout the industry.

To register or to find more information on the 2017 Five Star Conference and Expo, click here.

Property Loss: Harvey vs. Katrina

As DS News reported on Wednesday, property damage caused by Hurricane Harvey is projected by Moody’s Analytics to be between $51 billion and $75 billion, but there are immense unknown costs. Given the dense population of the impacted region, stats given to DS News by Black Knight Financial Services project Harvey’s effect on the mortgage market to be greater than that of Hurricane Katrina. In Houston and the surrounding areas, there are over twice as many mortgaged properties and four times the unpaid principal balances compared to Katrina’s FEMA disaster zones.

The GSEs—who announced a 90-day suspension of all evictions and foreclosures in primary disaster areas—own a majority of the impacted loans (56 percent). GSE loans have, on average, $100,000 higher balances than those held in agency and non agency securities. The average portfolio loan in Houston has a balance of $240,000 compared to $139,000 for the rest of the market. By investor, the GSEs account for 592,000 active mortgages, Ginnie Mae accounts for 194,000, portfolio lenders account for 175,000, and private lenders account for 87,000.

Subsequent to Hurricane Katrina, the number of borrowers in affected areas behind on their mortgage increased by 7.5 percent within the first two months. Within four months, the proportion of borrowers 90 or more days delinquent or in foreclosure rose by over 4 percent.

According to Black Knight, if a similar impact occurs in Houston, it would result in more than 75,000 borrowers being unable to make their mortgage payment within the next two months and 45,000 borrowers becoming seriously delinquent on their mortgage or facing foreclosure within the next four months.

Million Dollar ZIPs

shutterstock_672200080Increasing home prices aren’t a trend that just the middle and lower classes are experiencing—those in the million-dollar range are noticing, too. In fact, some of those that used to not have million-dollar price tags now do, according to research by Zillow.

Zillow examined the distribution of single-family home and condominium Zestimates across 29,991 different ZIP codes starting in 2007, considering areas with more than 10 percent of properties valued at 1 million or more to be a million-dollar area for the year. Compared to the national Zillow Home Value Index, which rests at $200,000, the average million-dollar ZIP had a Zillow Home Value Index of $900,584.

In 2007, there were 1,108 ZIP codes (3.77 percent of all examined) that were considered “million-dollar ZIPs”. Though in 2014 that figure had decreased to 958 (3.26 percent), that number has now increased to 1,280 (4.35 percent) as of May of this year. .

Property values are a big factor in million-dollar ZIP codes, with many concentrated in coastal markets. According to Zillow, of the 346 ZIP codes that were considered million-dollar ZIPs, 114 (32.9 percent) are on the West Coast in Seattle, Washington; Portland, Oregon; San Francisco, California; San Jose, California; Los Angeles, California; and San Diego, California. On the East Coast, New York, New York; Boston, Massachusetts; Miami, Florida; and Washington, D.C. made up another 92 new million-dollar ZIPS (26.6 percent).

However, Zillow explained that this growth is furthering the divergence in affordability between costal and interior cities. “Tech hubs” are largely considered million-dollar ZIPs with San Francisco (74 percent) and San Jose (77 percent) leading the way leaving other coastal ZIP codes to catch up. Seattle, for an example of a tech hub, has almost doubled it’s million-dollar ZIP codes from 2007’s 19 ZIP codes to now 38, which is 24 percent of the areas total ZIP codes.

To see the full article and take a look at your specific metro, click here.

Freddie Mac is ACE

home appraisalIn a buying climate that’s moving at an incredibly fast pace, Freddie Mac has announced a way to make things run even faster. Their automated appraisal alternative could possibly save homebuyers or homeowners looking to refinance up to $500 and cut as many as seven to 10 days off of closing. That is if Freddie Mac’s new technology determines them as not needing a traditional appraisal.

“By leveraging big data and advanced analytics, as well as 40+ years of historical data, we’re cutting costs and speeding up the closing process for borrowers,” said David Lowman, EVP of Freddie Mac’s Single-Family Business. “At the same time, we’re providing immediate collateral representation and warranty relief to lenders. This is just one example of how we are reimagining the mortgage process to create a better experience for consumers and lenders.”

The automated collateral evaluation (ACE) establishes whether consumers must use a traditional appraisal or not by “leveraging proprietary models and using data from multiple listing services and public records as well as a wealth of historical home values to determine collateral risks”. In order to find out if a property is eligible, lenders must submit the loan data through Loan Product Advisor, Freddie Mac’s smart end-to-end technology solution that assesses credit, capacity, and collateral to help lenders validate the quality of loans they originate.

If the estimated value of the home provided by the lender is acceptable to ACE, the lender can receive immediate representation and warranty relief related to the value, condition, and marketability for the property upon delivery of the loan to Freddie Mac. It will be available for qualified home purchases on September 1, 2017, but has been available for qualified refinances since June 19, 2017.

“When we launched Loan Advisor Suite in July 2016, we set out to give our customers certainty, usability, reliability, and efficiency,” said Andy Higginbotham, SVP of Strategic Delivery and Operations for Freddie Mac’s Single-Family Business. “ACE is our most recent capability to deliver on that vision.”

For more information on Loan Advisor Suite, click here.

Meet Mr. Cooper

shutterstock_365222318Nationstar Mortgage officially announced at the opening bell of the NYSE Monday morning its rebranding as Mr. Cooper. DS News sat down with their CEO, Jay Bray, to discuss this monumental change in an exclusive interview. 

This change has been in the works for some time now. Could you talk a little about all the moving parts that come into play when trying to rebrand a national corporation?

When you think of an incredible customer experience, the mortgage industry doesn’t come to mind. And it’s time for a change. As the leading nonbank servicer, change has to start with us, and now our goal is to completely transform our company and the industry. Monumental change like that is no easy task, so we knew we needed to start from the inside out. We started our journey by building our business on the foundation that happy team members lead to happy customers—it was a cultural shift we knew would take time. To convince our team that we were dedicated to this new journey, we have redefined our values, improved benefits, offered additional training and mentoring opportunities, listened to team member feedback, created engagement teams, and opened additional channels of communications for our team members.

We simultaneously focused on our brand name change, researching names that would resonate with both our team and customers. We needed to pick a bold name that matched our bold aspirations. Once we selected Mr. Cooper, we developed creative assets to bring the brand to life and fostered an understanding internally to breathe life into the name with all 7,000 of our team members who are the embodiment of the Mr. Cooper brand and strive to be advocates for our customers.

In a parallel path, we’ve been investing in the customer experience, creating new tools and features that will make the home loan journey more rewarding for our more than 3 million customers.

Now, on August 21, we take our next big step in our transformation journey—officially changing our name to Mr. Cooper.

What sort of obstacles did you encounter on the road to renaming Nationstar?

With any major transformation, as was true with our company transformation to Mr. Cooper, there are goals to meet and perhaps even more challenging perceptions to change. With happy team members and happy customers as our north stars, we knew we had to prioritize communication and develop a better experience for both of those audiences.

We spent an entire year rolling out this transformation to our team members, ensuring their understanding and embodiment of the ideals of Mr. Cooper, to align our entire company. This involved months of trainings, information and goal sharing and two-way communication. The impact of our investments in our team are infectious and it is amazing to see how our team has embraced Mr. Cooper.

Following our rollout of our internal transformation, we sought to transform the customer experience–we needed to do more than just talk about an exciting rebrand—we had to walk the walk. In taking a close look at customer feedback, we made real, substantial changes: we launched a new website and mobile app, with user-friendly tools and features and completely changed our operational and customer-facing technology. We have also moved all of our customer service operations back to the U.S., removed all fees for on-time online payments and offered more robust, easy to understand content. To do this we’ve invested more than $90 million in our technology and infrastructure and completed more than 50,000 hours in customer service training company-wide. We think it’s working too. Our complaints are down over 70 percent in the past two year. 

Looking forward, what do you hope to accomplish with the rebranding?

I’m glad you asked that. It’s been an incredible transformation—but we still have work to do. We want to build trust by putting the service back in the servicing industry, using innovation and technology to create an incredible customer experience. To grow our business by retaining existing customers and reaching new customers, we had to give our customers a reason to believe in us. We had to change from the inside out, and we are excited to have a tangible representation of that promise in our rebrand to Mr. Cooper.

In the near future, Mr. Cooper will be launching exciting new technology that will further assist current customers and prospective homeowners as they prioritize their finances. 

Can you tell me a little bit about the significance of the name Mr. Cooper?

After extensive research and testing, Mr. Cooper was selected as our new brand name. It personifies the next generation of home loan servicing and lending for the company and represents a more personal relationship with customers can have with their home loan provider. We recognize the critical role of a customer advocate in delivering a positive experience and aligns the entire company behind the spirit of customer advocacy.

The New York Stock Exchange is quite the stage. What were your goals or intentions behind unveiling this move here?   

Our sentiments exactly. We can think of no better way to literally ring in a new day and new brand than with the honor of ringing the bell at the NYSE. We are also very excited to have ten team members join us on the podium—each selected for their role in the successful launch of Mr. Cooper and their embodiment of Mr. Cooper core values. The launch of Mr. Cooper is really a celebration of our team and their hard work and we look forward to showcasing their achievements.