Risk Management in Focus: A Roundtable with MDK’s Compliance Leaders

The mortgage and timeshare industries operate within a highly regulated landscape, making risk management a critical concern. In this roundtable discussion, Executive Director of Legal & Compliance Ben Ogg and Compliance Officer Kirsten Friedman delve into the most common risks facing banks and mortgage servicers, offering insights into effective strategies for mitigating these challenges. From staying updated on regulatory changes to leveraging technology and training, discover how to build a robust compliance framework.

MDK: What are the most common risks that banks and mortgage servicers face in default litigation?

Kirsten Friedman: Our industry is highly regulated, requiring us to align within a complex legal framework, from major federal regulations to state and local rules that govern each case. Key risks arise from requirements like those under the FDCPA, enforced by the CFPB, and the obligations imposed by the SCRA. We must also ensure compliance with investor and insurer guidelines and requirements.

MDK: How do you stay updated on emerging risks in the mortgage and timeshare industries?

Ben Ogg: We stay informed through our subscriptions with the CFPB, Fannie Mae, Freddie Mac, Lexis, and other subscriptions that hone in on foreclosure and loan servicing within our footprint. Additionally, we rely heavily on collaboration with our state practice groups to keep us updated on local developments that may result in a change to processes for either MDK or our clients.

MDK: What proactive measures can be taken to mitigate risks in default litigation?

KF: We maximize our use of case management systems, document generation software, and automation technology to seamlessly integrate compliance into our processes. Technology plays a crucial role in meeting diverse requirements. Educating our team is key—when everyone understands the 'why' behind procedures that may seem time-consuming, it helps maintain alignment and compliance.

Ben Ogg: To build off what Kirsten said, we've integrated compliance into our daily routines. This means that our team is always aware of their responsibilities, without feeling burdened by them. It's become a natural part of how we work.

MDK: How do we collaborate with our clients to identify and manage risks effectively?

BO: It's a two way relationship. We're always looking out for them, and they're monitoring what we do as well.

KF: Many client inquiries revolve around questions like, “What's the rule on this?” Clients often seek our insights into best practices and their obligations. Like Ben said, it’s a two way street of communication.

BO: We keep clients informed about the intricacies of state and county regulatory changes, as they may not be as familiar with these details as they are with federal regulations.

MDK: What training programs do we offer to ensure our clients and our staff are well versed in risk management and compliance?

Kirsten Friedman: Internally, training is one of our most valuable tools. I once had someone ask me during a session, “I've been here for about six months—when does the training end?” I gently responded, "It never does."

BO: Our client training sessions focus on critical compliance issues, such as the FDCPA, SCRA, and CFBP regulations- the alphabet soup of risk management. We'll also provide detailed guidance and training related to the foreclosure and bankruptcy procedures specific in our states.

KF: To chime in, we just did a training for a client who wasn't as familiar with Act 6 and Act 91 notices in Pennsylvania.

MDK: What is an ongoing trend you are seeing in risk management for the mortgage and timeshare industries?  

BO: Loss mitigation regulations continue to evolve rapidly. We’ve seen many, many rewrites of the regulations from Fannie, Freddie, VA, and HUD that our clients must follow.

MDK: To wrap things up, could you share examples of successful risk mitigation strategies you’ve implemented?

KF: It's tough to pinpoint a single aspect, as compliance is deeply ingrained in our processes. We’re continuously updating work queues, templates, and automation, making it an ongoing cycle of improvement.

BO: We've mentioned this throughout our discussion, but it's worth repeating—the FDCPA is a significant risk factor, not just for our firm but for our clients as well. Kirsten’s dedication to internal training and her efforts to streamline our procedures have been instrumental in making our compliance processes more intuitive and effective.

MDK: Thank you both for sharing your invaluable insights today!

KF: It was a pleasure—thank you!

BO: Thank you!