Mortgage & Escrow Collaboration

1. 37th Annual Business Meeting& Education Conference Mortgage & Escrow Collaboration Rick Hill - Mortgage Bankers Association Penny Reed - Wells Fargo May 20, 2017

2. Current Environment • Regulatory uncertainty • Lenders fear of buybacks • Still learning about the implications of TRID • Worries about third party oversight – both directions • Lenders and settlement agents all trying to close loans while protecting themselves This slide look familiar? We used it last year Nothing has changed

3. A Path Forward, Through Collaboration Don’t wait for regulators to tell us what to do. Collaborate across the entire mortgage industry. No finger pointing.

4. Current Collaborative Efforts • GSE Uniform Closing Dataset • Closing Instructions • Fee Names • Predictable Recording Fees

5. GSE Uniform Closing Dataset Requirements • In 9/17, lenders report Borrower Closing Disclosure (CD) data • Includes all data in the CD • Includes a copy of the CD • Known as the Uniform Closing Dataset (UCD) • In Q3/18, lenders report the Seller Closing Disclosure data • https://www.fanniemae.com/content/news/ucd-announcement-november-2016.pdf Things To Think About • Lenders must ensure that the CD and data are the same • Lenders need the final CDs and data in a timely manner • Lenders will seek electronic exchanges of the data from closing agents to reduce errors

6. GSE Uniform Closing Dataset - Collaboration • Continue to collaborate to improve workflow between lenders and closing agents • Preclosing • Post closing • Utilize industry standard data formats to exchange data • Coordinate discussions with the GSEs regarding the cost/value of the Seller UCD reporting requirement

7. Closing Instructions – Current World • Delayed delivery of instructions • Inconsistent instruction formats and content from various lenders • Inclusion of certain language that is not appropriate for these documents • Some closing agents don’t follow instructions

8. Closing Instructions – Collaborative Effort • We will create a Uniform Closing Instruction template • Same information in the same place from lender to lender • Prioritized content • Easy to find contact information • We will create guidelines for consistent use across lenders • We are not focused on the legal language in the first stage. We will create sample language • MISMO • This will be a consensus standard issued by MISMO – Everyone has a say within MISMO • MISMO needs your expertise to get it right • ALTA, title companies and vendors already collaborate • Important: We are not trying to fix everything in the first stage

9. Fee Names – Current World • Fee names vary from lender to lender, closing agent to closing agent, and jurisdiction to jurisdiction • Disclosure documents and data exchanges need to use consistent language • Hard to get it right when everyone has their own name for the same thing

10. Fee Names – Collaborative Effort • Create a standard set of fee names and definitions for use by lenders, closing agents, and others across the industry • Ensure that names and definitions are friendly for consumers • Ensure compliance with CFPB requirements • Develop and issue standards in stages (maybe annually?) • Collaborate across industry to encourage adoption of the standards • MISMO • This will be a consensus standard issued by MISMO – Everyone has a say within MISMO • MISMO needs your expertise to get it right • ALTA, title companies and vendors already collaborate

11. Predictable Recording Fees

12. Collaboration – What Else Can We Do?