State Law Updates
New Hampshire bill HB-1687 amends provisions related to the retail installment sales of motor vehicles, small, title, and payday loan provisions.
Another state's bill SB-314 provides a rebuttable presumption that an individual is not engaged in the business of a mortgage banker, broker, servicer, or originator if the individual is not involved in more than three (3) loans in any consecutive twelve (12) month period.
FDCPA: "Mini-Miranda" Notifications
BY SVIATLANA LIASHCHYNA
All foreclosure law firms provide “mini-Miranda” disclosures in all their written and oral communications with a customer. The firms provide these disclosures to comply with the Fair Debt Collection Practices Act (FDCPA) requirements and contractual requirements; however, the FDCPA is not clear whether it applies to the foreclosure law firms. Considering the judicial interpretation differences, firms are left with the question of whether their “mini-Miranda” disclosure should state “the firm MAY be deemed to be a debt collector” or “the firm IS deemed to be a debt collector.”
Although certain jurisdictions have not yet addressed whether the actions completed by law firms during the foreclosure proceedings fall under the FDCPA requirements, the courts that have rendered their opinion on this matter mostly considered the following:
Risk of the Affiliated Vendor Engagements
BY SVIATLANA LIASHCHYNA
On May 25, 2018 the U.S. District Court for the Southern District of New York heard the oral arguments for defendants’ motions to dismiss in a case referred to as being “about banks and law firms fleecing the Fannie Mae, Freddie Mac, and FHA”[Case 1:12-cv-07199-JSR, Third Amended Complaint]. The plaintiff alleged violations of several provisions of the False Claims Act. [Violations referenced in the case relate to the following provisions of the False Claims Act: 31 U.S.C. § 3729(a)(1)(A); 31 U.S.C. § 3729(a)(1)(B); 31 U.S.C. § 3729(a)(1)(C); 31 U.S.C. § 3729(a)(1)(G).] The action was brought by the Unites States of America against over 15 mortgage servicers, as well as 2 default services law firms and their affiliated process serving and title companies. The allegations are based on improper invoicing practices implemented by the law firms; during the foreclosure process, the firms submitted to the servicers marked-up invoices from their affiliated title and process serving vendors. This resulted in Fannie Mae, Freddie Mac, and FHA providing reimbursements to the servicers based on the “false and fraudulent”[Case 1:12-cv-07199-JSR, Third Amended Complaint] foreclosure claims which included those marked-up costs. The court has not yet issued any orders in this case; however, we would like to remind firms about the applicable requirements and what practices need to be considered to ensure compliance with those requirements.
Sudden influxes in file volumes and unexpected projects can upset the balance of your law firm's workload. To manage your fluctuating workflow and keep your staff focused on core competencies, legal process outsourcing (LPO) is a good solution for getting reliable support.
But finding the right vendor to manage your legal processes is challenging - especially if you don't ask the right questions. As you research and interview LPO vendors, the following questions will help you identify whether or not the provider is a good fit for your firm.
1. What experience do you have in managing a law firm's legal processes?
When interviewing a potential vendor, ask whether or not the company has extensive experience in LPO. The answer should instill confidence that this vendor can bring a fresh perspective to your firm, help identify areas for process improvement and highlight gaps that need to be filled. An experienced LPO vendor will want to do all that and more in order to manage your legal processes most efficiently.
2. What approach will you take when setting up and managing our files?
Handing over your files to an LPO vendor can feel risky, so it's important to know the vendor has good processes in place. Ask how the team will set up and manage your files, so you know what to expect.
For example, when we take on new law firms for LPO services, we walk them through our high-level implementation process. This includes identifying goals and objectives, learning the firm's business processes and sharing a proof of concept.
3. What is your pricing model?
When it comes to pricing, the way your LPO provider chooses to bill has a significant impact on your budgeting and ROI. Typical models include: monthly fee with minimum volume requirements; per-resource, similar to traditional staffing agencies; per-piece, paying by work volume.
With a360inc Firm Solutions, we offer a per-piece pricing model so you only pay for what you use. This is a unique approach in the industry and allows you to manage volume volatility, giving you the most value from your investment.
4. What makes your LPO services compliant with mortgage servicers' requirements?
If you're with a creditor's rights law firm, this is a critical question. Servicer and investor requirements continue to become more rigorous. It's important to find an LPO vendor that can simplify the complexities of compliance.
We make it easy for creditors' rights firms to remain compliant in our highly regulated environment by implementing practices such as providing you credibility packets you can send directly to your clients' this packet verifies our position as a compliant third-party vendor. And because of stringent servicer regulations, all of our legal and business process resources are based in the U.S.
When it comes to balancing your firm's workload and maximizing cost-efficiency, asking the right questions will help you find an LPO provider with the potential to drive successful transformations at your firm.
At a360inc, our extensive background and expertise in the legal and default industries have positioned us as a preferred LPO partner for many law firms nationwide. Contact us today for an initial assessment.
Legal & Regulatory Updates
VA provided clarification on the regulatory requirement that all VA guaranteed loans, including Interest Rate Reduction Refinance Loans, require lender certifications. Please see VA Circular 26-18-14 for more information.
Document Retention and Destruction Practices
BY SVIATLANA LIASHCHYNA
Firms handle an overwhelming number of documents daily, most of which fall into one of these four categories: client legal files; firm financial records; firm business records (ex. internal policies, procedures, compliance programs, quality control reviews, etc.); and firm HR records.
In accordance with the Model Rules of Professional Conduct, “upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client's interests, such as …
Sharing trends and best practices to help you improve your processes and maximize your profitability.