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BY SVIATLANA LIASHCHYNA
as seen in Issue-30 of a360inc's Compliance Newsletter A reverse mortgage is a loan for older homeowners which allows them to borrow against the home equity and requires no monthly payments. Firms often receive referrals for completing reverse mortgage foreclosure actions, but what are the unique issues that firms should consider when proceeding with these actions and what laws and regulations apply? The majority of reverse mortgages are insured by FHA under the Home Equity Conversion Mortgage (HECM) program, which provides maximum loan amounts, borrower eligibility requirements, and servicing standards. Some lenders offer proprietary mortgage products typically designed to offer borrowers the protections similar to those allowed by the FHA HECM program. In light of this, Fannie Mae implemented Reverse Mortgage Servicing Manuals to provide servicing guidelines with regards to this mortgage type.
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BY SVIATLANA LIASHCHYNA
In the beginning of July, the new California Consumer Privacy Act (Act) made national headlines as the strictest privacy law in the United States. It provides consumers with the following rights: 1) the right to know and request that a business discloses what types of personal information is collected about the consumer, how it is collected, how it is used, and who it is disclosed to; 2) the right to direct a business not to sell the consumer’s personal information; 3) the right to request that a business deletes the consumer’s information, with some exceptions; and 4) the right not to be discriminated against because the consumer exercises their rights under the Act. Default legal services and collection law firms are provided with confidential information during the normal course of their business. In light of California’s new law, should these firms start modifying their internal policies and procedures to ensure compliance with this Act? Not quite - the firms are not required to comply with this Act directly, unless a client chooses to enhance their privacy policies nationally and requires firms to comply with the Act’s provisions through retention agreements.
Case Law UpdatesSMITH V. SELECT PORTFOLIO SERVICING, INC.
The plaintiff alleged that Select Portfolio Servicing Inc. (“SPS”) violated FDCPA 15 U.S.C. § 1692(e) by providing her with 10 “subsequent communications” stating “This is an attempt to collect a debt. All information obtained will be used for that purpose.” and did not state that the “communication was from a debt collector.” BY SVIATLANA LIASHCHYNA
According to OSHA (Occupational Safety and Health Administration), nearly two million American workers report having been victims of workplace violence each year. There are currently no federal laws which establish a duty for employers to prevent workplace violence against employees; however, employers – including law firms - have a duty to provide a safe working environment under the federal Occupational Safety and Health Act. Statistics show that about 43% of corporate executives believe that workplace violence is not an issue; an even higher percentage believes that it shouldn’t impact their budget. Despite these numbers and the lack of federal law, employers should be aware of the risks of workplace violence and how they can work to mitigate those risks. These risks include:
FOR IMMEDIATE RELEASE—TUESDAY, JULY 10, 2018
[DALLAS, TX] Today a360inc announces the launch of the organization’s new website, a360inc.com. The all-new, solutions-centric website is now the online home for well-known default servicing industry brands including CaseAware, the industry’s most prominent case management software system for creditors rights’ law firms, and Firm Solutions, the industry’s leading practice management, outsourcing, and consulting services provider. CaseAware and its parent company KMCIS were acquired by a360inc in September 2017. Firm Solutions was acquired in 2016, the same year a360inc purchased C2C Title, rounding out the employee-owned company’s suite of law firm practice management, outsourcing, technology, title, consulting, and compliance solutions utilized today by over 250 leading creditors rights’ law firms. “Since our formation as an Employee Owned Company in January 2017, a360inc has been intensely focused on the execution of our strategy to become the industry’s premier technology and outsourcing provider for law firms and their business partners. The recent consolidation of our brands and go-to-market initiatives under the a360 banner (www.a360inc.com) is a major milestone for the group and further refines how our clients, markets and business partners view and understand our value proposition. Through our acquisitions over the last few years, we have built a meaningful suite of solutions in the technology, outsourcing (LBPO), title search, compliance, and general consulting arenas.” said Chief Executive Officer Scott Brinkley. Brinkley continued, “If a law firm’s focus is to optimize their operational model, reducing costs through best-in-class software and technology delivery as well as outsourcing solutions, the suite of services provided by a360inc is a great place to start that journey!” CaseAware and Firm Solutions support protocols for existing clients remain unchanged by the website move. “For our existing clients, this simply means that you can now see the bigger picture and share in the vision,” said Chief Operating Officer Jan Duke. Duke added, “Our focus on service will only be supported by having all of our tools to build your business and improve efficiencies in one place now.” about a360inc a360inc is a 100% employee-owned holding company that provides industry-leading technology, practice management, outsourcing, title, compliance, and consulting solutions for the legal and mortgage servicing industries. a360inc is based in Carrollton, TX with offices in Tampa, FL; Colorado Springs, CO; Detroit, MI; Chicago, IL; New London, CT; Jacksonville, FL; and St. Louis, MO. Led by industry experts, a360inc is the industry’s single point solution center for all of your back office needs to grow, optimize, right-size, or refit your practice, your people, and your position in the market. Learn more at a360inc.com. Download and share the release.
State Law UpdatesNew Hampshire 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" NotificationsBY 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[1] 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[2], the courts that have rendered their opinion on this matter mostly considered the following:
Risk of the Affiliated Vendor EngagementsBY 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 UpdatesVA 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 PracticesBY 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 …
State Law UpdatesTennessee Tennessee has enacted the bill that pertains to the regulation of electronic notarization for Notaries Public. Maryland Maryland bills were enacted to amend several provisions related to SCRA, debt collection, and loan updates. (HB-1297) (SB-1068) General Data Protection Regulations (GDPR): Law Firm ConsiderationsBY SVIATLANA LIASHCHYNA
The European General Data Protection Regulations (GDPR) went into effect on May 25, 2018. The GDPR provides for a stricter set of legal privacy standards than the current U.S. laws and is applicable to companies that collect, process, or transfer personal data of EU citizens regardless of their location. a360inc previously provided a high-level overview of the GDPR requirements and indicated that many firms’ clients may enhance their own privacy requirements; however, due to the fact that the GDRP is still so new, there are many areas which still remain unclear. |
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