--- title: Fair Lending Doesn’t Stop at Closing! description: Under the Equal Credit Opportunity Act (ECOA,) it is unlawful for a lender to discriminate on a prohibited basis in any aspect of a credit transaction, and under both the ECOA and the [Fair Housing] Act, it is unlawful for a lender to discriminate on a prohibited basis in a residential real-estate-related transaction. --- [Newsroom ](https://www.mqmresearch.com/newsroom) # [Fair Lending Doesn’t Stop at Closing!](https://www.mqmresearch.com/newsroom/fair-lending-doesnt-stop-at-closing) Written by [MQMR Blogger](https://www.mqmresearch.com/newsroom/author/mqmr-blogger) | May 13, 2022 8:58:47 AM **Fair Lending Doesn’t Stop at Closing** **April 28, 2022**   **Speakers:**   Scott Weintraub, MQMR Jerry Jamieson, New American Funding   **Agenda:**   Consistent Procedures for Servicing Customer Service Calls Collections Calls Applications for Loan Modification / Loss Mitigation Applications Received after Referral to Foreclosure  Exceptions and Process Tracking and Reporting Q&A   **Fair Servicing**    “Under the Equal Credit Opportunity Act (ECOA,) it is unlawful for a lender to discriminate on a prohibited basis in any aspect of a credit transaction, and under both the ECOA and the [Fair Housing] Act, it is unlawful for a lender to discriminate on a prohibited basis in a residential real-estate-related transaction. A lender may not, because of a prohibited factor: […] Fail to provide information or services or provide different information or services regarding any aspect of the lending process [or] treat a borrower differently in servicing a loan or invoking default remedies.” **Fair Servicing Compliance Best Practices**   - Include Servicing in Fair Lending Program - Policy and Procedures - Designation of Fair Lending/Servicing Officer - Fair Lending/ Servicing Committee, with representatives from Executive Management and/or Board of Directors - Fair Servicing Training Requirements - Monitoring of Loans for fair servicing issues  - Fair Servicing Data Analysis - Action Steps to implement change as needed **Consistent Policies and Procedures**   Ensure that all borrowers are treated fairly in every stage of the servicing process such as: - Servicing Transfer – Does the borrower have a pending application for Loss Mitigation  - Payments                 □ Applied consistently and compliantly                 □ Suspense Account Funds  - Applications - Loan Modification and Loss Mit - Fee Waivers – Late Charge / NSF   **Training**   - Ensure that all employees understand that Fair Lending extends to Servicing as well - Include targeted, job-specific training - What can your company’s employees do, while performing their job duties, to ensure Fair Servicing?                 □ Outreach to customers in geographic areas hit hardest by COVID – 19                 □ Strategy for LEP customers                 □ Document efforts made to assist customers prior to referral to foreclosure **Customer Service**   - Are you providing fair and equal service to all borrowers? - SLAs for Responses to Borrower Questions - Requests for documentation - payment history, payoff statement - Payment Options – Phone, Internet, Check - Are free options communicated? - Escrow Analysis / Balance / Statements - Forced-Placed Insurance               □ PMI Removal   **Collections**   - How are borrowers treated once they are in default? - Collections Calls – Are frequency and tone of calls the same?  Are borrowers provided the same opportunities, such as a Loss Mit Application? - Fee Waivers – How does actual practice compare with company policy? - Letters – Do borrowers in similar situations receive the same notifications across the same timeframes? - How are inbound calls handled? - How is the LOS Updated?   **Loss Mitigation Applications**   - How are incomplete applications treated?                 □ Is there a consistent process for follow-up on the items needed for a complete application? - Tracking and Reporting – Are you tracking incomplete applications, including the number of follow-ups and whether contact with the borrower was successful? - Decisions – Do borrowers in similar situations receive the same outcome?                 □ Are you performing Fair Servicing Data Analysis? - How are applications treated when received after the loan has been referred to foreclosure?                 □ Is there a consistent process for notifying the foreclosure attorney to prevent the next step in the process from occurring?                 □ Is there a consistent policy for when a Loss Mit Application would be considered prior to a foreclosure sale?                                 ◉ Do you follow CFPB and/or State Law, or would you go beyond? **Exceptions and Process**   - Does your company allow for exceptions:             □ Fee Waivers             □ Loss Mitigation Decisions / Terms             □ Considering a Loss Mit App in advance of foreclosure sale - Is there a consistent process?             □ How to request an exception             □ Criteria for approval             □ Documentation of reason(s) for approval or denial and GMI info **Tracking**   - Does your company track the following:             □ Fee Waiver Requests             □ Customer Service / Collections Calls             □ Incomplete Loss Mitigation Applications             □ Loss Mitigation Decisions / Outcomes             □ Consideration of Loss Mitigation Applications             □ Exceptions - Do you have the GMI for all borrowers that provided it during the application process?   **Data Analysis**   - Loss Mitigation Applications - Loan Modification Decisions - Loss Mitigation Outcomes – home retention vs. disposition  **Initial Analysis**   - Incomplete Applications           □ % completed vs. closed - Considering Applications          □ Received while in foreclosure - Application Decisions         □ Loan Modification & Terms - Loss Mitigation Outcomes         □ Retention vs. Disposition   **Regression Analysis**   - When should you perform it?           □ If you have already identified disparities in your data that are statistically significant, but are not exactly sure what is driving the disparities.           □ Want or need a deeper understanding of the story that your loan servicing data tells. - Factors to consider:          □ Payment history, Previous loss mitigation history, BK history          □ Will also identify outliers for match pair comparative file review.   **Corporate Governance**   - A Fair Lending/Servicing Committee is comprised of executive management and/or the board of directors. The committee should meet on a quarterly basis and should address the following items:       □ Status and results of company-wide Fair Lending/ Servicing training       □ Review Fair Lending / Servicing Data Analysis Reports       □ Develop course of action for any protected class that appears to be adversely treated       □ Update, review and approve policies, procedures and/or internal controls Watch The **Fair Lending Doesn’t Stop at Closing Webinar below**   [View full post](https://www.mqmresearch.com/newsroom/fair-lending-doesnt-stop-at-closing) ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "MQMR Blogger" }, "dateModified" : "2022-05-13T08:58:47.432Z", "datePublished" : "2022-05-13T08:58:47Z", "headline" : "Fair Lending Doesn’t Stop at Closing!", "image" : { "@type" : "ImageObject", "height" : 849, "url" : "https://resources.mqmresearch.com/hubfs/FAIR%20SERVICING-1.png", "width" : 1884 }, "mainEntityOfPage" : "https://www.mqmresearch.com/newsroom/fair-lending-doesnt-stop-at-closing", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "/hs/hsstatic/content_shared_assets/static-1.4092/img/default-amp-logo.png", "width" : 60 }, "name" : "Newsroom" } } ```