Michael Waldron is the Chief Compliance Officer of Bayview Loan Servicing where he is responsible for the Compliance and Oversight Department’s management, leadership and direction as well as the company’s overall compliance strategy. With almost 20 years serving the industry in a wide variety of legal and compliance-related functions, Waldron is known for his ability to navigate the regulatory landscape and build relationships that add value to those with whom he works.
MReport spoke with Waldron about the current trends being seen in the servicing sector of the industry as well as his thoughts on how well the CFPB is working with comments from servicers on the new servicing updates.
What challenges are servicers currently facing as opposed to last year?
I think that the big ticket item is the amended servicing rules that have now come out in final. They'll be implemented in Fall of 2017 and into the early Spring of 2018. But what's interesting about those is, I give the credit to the Bureau for soliciting input from the industry and for their willingness to be responsive to some of the concerns that the industry has had since the January 10, 2014, servicing rules came out.
I think it's important to understand that we are in a process now in large part of refinement. It's a process that we're not seeing like we have before, large scale overhauls, but rather adjustments to existing systems and structures and requirements to add clarity and to add nuances and layers that, while it oftentimes makes it more difficult for the industry, quite frankly oftentimes it provides clarity and creates efficiencies. It levels the playing field and can be, if done appropriately, empowering to servicers themselves as well as to the consumers that we serve. So I'm not saying that this is a challenge-free environment.
Given the wholesale overhauls that we have seen and the pace of change that we've experienced, I think the last year has really been around refining concepts and coming to what I'll call a more sustainable pace, which is important.
By sustainable pace, do you mean things are kind of leveling out or are they just getting to be more manageable for you?
Well I think in large part it's sustainable because of the structures, to the credit of the servicers, it's because of the structure that the servicers have put in place, to digest the change. So again, I'm not suggesting that the pace is diminished, but the manner in which servicers are able to digest, process, analyze and implement has improved greatly. The system, the infrastructure, the talent is in place, the focus is there. So when you have that, we, I think collectively as an industry, are better suited to address the changes and the requirements that are coming our way.
How are you or servicers able to address those changes?
It's people, it's process, it's technology. It's a resource model and this is a resource intensive business whether it's monetary or whether it's headcount. So we address it by devoting appropriate resources to a good foundation in a sound structure. We address it by being willing to attract and retain talent that's able to do the analysis, that knows the operations, that can work in conjunction with the business from a compliance support perspective, legal and compliance support perspective, that can work in conjunction with the business to add value to the platform. That's how we address it.
How well do you think the CFPB has been paying attention to these comments or paying attention to what the industry is saying about these new servicing updates?
I think in part they have probably done a better job of that than virtually any other regulatory agency. I think being a new regulator, it took them some time themselves to put the appropriate structure in place and to develop the right and attract the right talent. But their willingness through forums, through what Lori just did and Lori does all the time, coming out and speaking to the industry, being receptive to interactive sessions, holding webinars, putting out significant guidance whether it be supervisory highlights or manuals. They have their own component on the web site for borrower education and industry member education through videos and white papers. There's a tremendous amount that they've invested, if you want to talk about a resource model, that they've invested into not only making themselves successful but in an effort to make their relationship with industry members and consumers a successful and mutually beneficial relationship.
Now have they always hit the mark? No. But I do and have noticed that it's something that they strive for and, again, in large part the amended servicing rules are in direct response to industry members' concerns, to areas that they saw based on their own supervisory activities that needed clarification. So I do think that it's an area that they've worked very hard at. It's an area that we as an industry have worked very hard at. So I am encouraged that we will continue to hit our stride together. And at the end of the day, we are all focused on the customer experience and making certain that we have a sustainable market so that consumers can appropriately participate in home ownership.