The Ledger - April 2012

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A NATIONAL BANKRUPTCY SERVICES PUBLICATION

THE NEW RULES FOR BANKRUPTCY MORTGAGE SERVICING AREN’T REALLY “NEW”Rule 3002 nationalizes procedures already in effect in many localities

Keeping third-party relationships safe

and sound

An interview with NACTT President

Debra Miller

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THE LEDGERAPRIL 2012

Larry BuckleyCEO [email protected]

Brad CloudCOO [email protected]

Dave [email protected]

Tom [email protected]

Contributing Writers Hilary B. Bonial, Joe Lozano, Katherine Porter, Wes Wiley

Magazine Design HW Creative, HWideas.com

THE LEDGER is a National Bankruptcy Services publication. © 2012 National Bankruptcy Services All Rights Reserved

9441 LBJ Freeway, Suite 250 Dallas, TX 75243

NBSDEFAULTSERVICES.COM « APRIL 2012

FORTUNATELY, WE HAVE THE MOST COST EFFECTIVE, COMPLIANT BANKRUPTCY SOLUTIONS FOR KEEPING EVERYTHING IN CHECK.

Since 1987, we’ve focused on helping companies deal with the maze of bankruptcy cases by consistently increasing recovery results, reducing loan losses, and improving the bottom-line performance of their bankruptcy portfolio. Contact NBS and let us help you stay ahead of the game.

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214.550.4204NBSdefaultservices.com

RESIDENTIAL MORTGAGE LENDERS AUTOMOBILE FINANCE COMPANIES BANKS, CREDIT UNIONS, & FINANCIAL INSTITUTIONS CONSUMER LENDING ORGANIZATIONS PORTFOLIO SERVICERS, OWNERS & INVESTORS

The information in this publication is not a substitute for the advice of an attorney and is not legal advice.

A NATIONAL BANKRUPTCY SERVICES PUBLICATION

IN THIS ISSUE

ISSUES

A summary of OCC requirements, providing a blueprint for banks and vendors working on better and more

e!cient compliance.

2

FOCUS

An interview with Debra Miller, President of the National Association

of Chapter Thirteen Trustees (NACTT).

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8

2

INGOD WETRUST

DATA

A look at bankruptcy data from across the nation, with detailed

state-by-state breakdowns of filings.

16

TABLE OF CONTENTS

» KEEPING THIRD-PARTY RELATIONSHIPS SAFE AND SOUNDUnderstanding the OCC vendor management requirements 2

» THE NEW RULES FOR BANKRUPTCY MORTGAGE SERVICING AREN’T REALLY “NEW”Rule 3002 nationalizes procedures already in effect in many localities 6

» REGULATOR ROUNDUPConsumer Financial Protection Bureau: Much accomplished, and more to come 10

» BY THE NUMBERSTaking a look at the state of bankruptcy 16

» CONDUCTING A THOROUGH PORTFOLIO HEALTH CHECKDiagnosis and Prognosis 20

» HOT SEATDebra Miller, NACTT President 22

» IN DEPTH

A look at the NBS proof of claim and plan review process 24

THE LEDGER » NBSDEFAULTSERVICES.COM

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KEEPING THIRD-PARTY RELATIONSHIPS SAFE AND SOUNDUnderstanding the OCC vendor management requirements

BY HILARY B. BONIAL


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The recent upheaval in the mortgage servicing industry has brought major changes to the level of oversight required when a servicer outsources any task. One important area for

compliance review is the contractual requirements contained in recent dra"s of engagements or servicing agreements. The main source referenced in the agree-ments is the O!ce of the Comptroller of the Currency’s (OCC) vendor management requirements, which are set out in the master services agreements from major banks. Compliance with the OCC vendor requirements will minimize the risks of your third-party relation-ships and ease the burdens of OCC examination.

The key document is OCC Bulletin #$$%-&' (“Bul-letin”), which was originally issued on November %, #$$% and substantially revised in #$%%. The purpose of the Bulletin is to provide guidance to national banks on managing third-party relationships and the risks associated with outsourcing. The Bulletin pro-vides basic guidelines that the banks are expected to follow when considering using a third-party vendor. Each and every contract or association that a nation-al bank establishes with a supplier, outsourcer, ven-dor, or attorney (rm should be subject to the initial and continuing risk management process described in the Bulletin.

The Bulletin makes it clear that the OCC expects a bank’s board of directors and management to oversee all third-party relationships on an on-going basis. The requirements are not merely for on-boarding a new vendor, but also apply to careful management of established relationships. The OCC expects the man-agement and oversight of vendors to include the fol-lowing steps:

A risk assessment of the bank’s needs;Proper due diligence for the selection of a vendor;Written agreements and statements of work that clearly de(ne roles and responsibilities;Continued oversight of vendor performance and compliance.To comply with the OCC standards, banks should

ensure that using a vendor will serve their overall strategic needs, and they should have a clear idea of

the performance criteria, internal controls, and re-porting needs that will be used to oversee the vendor.

Banks should assess whether they have the internal expertise to evaluate and manage the outsourcing. If not, the internal expertise must be developed and established before the vendor relationship begins. Of course, there is a cost / bene(t component at work in the (nal decision to outsource, but the OCC Bulletin clari(es that this analysis is not to be the only factor at work in vendor relationships. The review of any prospective vendor should also include an examina-tion of their experience, their (nancial stability, their reputation, and their quali(cations. There should be a formal process for vendors to submit such informa-tion in a written proposal.

The impact of the OCC requirements is initially seen in the contract provisions that many banks included in their updated master servicing agreements with third-party vendors. As usual, the written contracts and statements of work establish the expectations and obligations on both sides of the agreement. The agreements should no longer be short, general state-ments, however, because the contract needs to de(ne in detail the performance expectation for the ser-vices provided and how success or failure to meet those expectations will be measured. The perfor-mance measures should be created to the satisfaction of both parties. The OCC suggests that poor perfor-mance by a vendor should be penalized. For this rea-son, it is particularly important to clearly de(ne the expectations and criteria to determine if a failure has occurred. The agreement should maintain that quar-terly meetings between senior vendor and banking representatives will be conducted to ensure all par-ties remain engaged in the management of the out-sourced processes. Regular reporting obligations should be clari(ed, including determining the re-sponsibility for providing reports and the frequency of the reports. To properly identify the content of the reporting in the agreement, the bank and the vendor need to agree on the areas and issues to be tracked.

In updated vendor agreements, most banks will ad-dress the escalation of customer complaints and clarify

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who is responsible for responding to such complaints. The OCC Bulletin also seems likely to result in banks adding language that de(nes alternate dispute resolu-tion processes or mediation agreements. It will be up to each party to ensure they are comfortable with any ju-risdictional agreements or waivers of rights to jury trials in the event of a material breach or disclosure of con(-dential information. Additional language addressing any limitations on liability may also be present.

Finally, vendor agreements should provide clear and complete direction on the default and termina-tion of the agreement. The OCC suggests that parties should have the ability to cure defaults upon timely noti(cation. It is also likely that the agreement will include provisions for termination for no cause. In addition, agreements may include a provision that allows the bank to terminate the relationship in the event the OCC formally objects to the vendor.

Per the OCC Bulletin, monitoring and oversight of an installed vendor should focus on four main areas. The (rst area of oversight is the continued (nancial stabil-ity of the vendor. Historically, vendors have not been required to proactively provide quarterly audited (-nancials or proof of current insurance coverage. The regular provision of (nancials and insurance veri(ca-tion is now clearly required. The second area for over-sight addresses audits by the banks. Vendors should expect annual on-site audits. For vendors who repre-sent multiple creditors, this change will make the pres-ence of external auditors in the o!ce a common occur-rence. The audit standards also address the implementation of procedures for monitoring the re-sults of a vendor’s internal and external audits of its policies, processes, and data security. Vendors should provide updated copies of the disaster recovery and business resumption plans for compliance review with

the bank’s current requirements. Third, the oversight will include operational review of quality and perfor-mance of the services provided by the vendor. Banks should regularly receive and review reports that pro-vide evidence of compliance within the agreed service levels. Any de(ciencies in performance or compliance should be documented and addressed with written improvement plans. The fourth area for oversight is checking the documentation of all aspects of the rela-tionship. All parties should have complete and current copies of the operating agreements. The bank manage-ment is expected to conduct regular surveys of the risk management and performance reports from the ven-dor, and to provide up-line reporting of compliance with the agreements to the board of directors.

Overall, it is clear that the banks will be maintain-ing vigilant watch over their vendors. It is imperative that vendors are prepared for the requirements and have well-de(ned plans to both comply and to prove their compliance. For larger vendors, these process-es are already substantially in place and only need to be organized to the particular bank’s preferences. For smaller vendors, however, the costs of building and maintaining the required compliance processes and procedures may be substantial. This summary of the OCC requirements provides a road map for banks and vendors working on better and more ef-(cient compliance.

Hilary B. Bonial serves as General Counsel for National Bankruptcy Services, LLC. and is Of Counsel for Brice, Vander Linden & Wernick, P.C. She is certified by the American Board of Certification in Consumer Bankruptcy.

“COMPLIANCE WITH THESE

REQUIREMENTS WILL MINIMIZE THE RISKS

OF YOUR THIRD-PARTY RELATIONSHIPS

AND EASE THE BURDEN OF OCC

EXAMINATION.”

BANKRUPTCY IS NOT THE ENDOF THE ROAD.

Call today to see how NBS can accelerate recovery through precision auto loan bankruptcy management services.

NATIONAL BANKRUPTCY SERVICES


214.550.4204NBSdefaultservices.com

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THE NEW RULES FOR BANKRUPTCY MORTGAGE SERVICING AREN’T REALLY “NEW”Rule 3002 nationalizes procedures already in effect in many localities

BY JOE LOZANO

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O n December %, #$%%, the Federal Rules of Bankruptcy were amend-ed to change the obligations on creditors and mortgage servicers in

consumer bankruptcy cases. While the changes may seem daunting, many of the requirements embodied in the rules have been in place in some variation in many bankruptcy courts across the country. Because the changes are effectively implementing national practices in place of local ones, these “new” rules are actually familiar re-quirements in some ways. Their implementation presents opportunities for standardizing proce-dures across districts.

Federal Bankruptcy Rule )$$#.% (“the Rule”) is an e*ort to improve transparency and accu-racy. It requires three speci(c notice types to disclose information: %) Notice of Payment Change; #) Notice of Postpetition Mortgage Ex-penses, Fees, and Charges; and )) Response to Notice of Final Cure.

The Notice of Payment Change requirement ini-tially reared its head in #$$& when the Western District of Pennsylvania adopted “Chapter %) Pro-cedure # + — Notice of Monthly Payment Changes.” The requirement spread to other jurisdictions, gain-ing substantial popularity in #$$+, when #& bank-ruptcy districts joined %# existing districts that re-quired creditors to provide debtors with notice of payment changes. While many of those districts required that a creditor provide )$- to ,$- days no-tice before the e*ective date of a payment change and further required the use of a local form for giv-ing notice, the Rule creates a standard national form and a uniform #%-day deadline by which to (le the notice before the e*ective date of the payment change. The Rule requires that the notice be accom-

panied with a supporting attachment in the form of the notice required under applicable non-bank-ruptcy law. For example, if the payment change has been (led because of an interest rate change, the notice must be accompanied by the standard ad-justable rate mortgage letter that a debtor would have received even if they were not in bankruptcy.

The Rule calls for mortgage creditors to (le a Notice of Postpetition Mortgage Expenses, Fees, and Charges. This notice advises parties in inter-est that postpetition amounts have been assessed to a debtor’s loan that the creditor believes are recoverable against the debtor and for which re-imbursement will be sought. This procedure is akin to the Southern District of Texas’s Chapter %) Notice to Mortgagee, which was implemented in October #$$-. While that court required that a creditor (le an annual proof of claim advising of postpetition amounts, the Rule requires that creditors provide notice within %.$ days of as-sessing an amount to the loan. This will usually

work out to semi-annual Notices of Postpetition Mortgage Expenses, Fees, and Charges. The na-tional form for giving this notice provides a non-exhaustive list of potential costs to be disclosed: late charges, non-su!cient funds (NSF) fees, at-torney fees, (ling fees and court costs, bankrupt-cy/proof of claim fees, appraisal/broker’s price opinion fees, property inspection fees, tax and insurance advances on non-escrowing accounts, and property preservation fees. The form pro-vides further additional space for creditors to disclose details of other assessments that are not speci(cally mentioned. To the extent that a bank-ruptcy court has previously granted a creditor the right to collect or assess an amount, additional notice of that amount is not required.

THE NEW RULES FOR BANKRUPTCY MORTGAGE SERVICING AREN’T REALLY “NEW”

“BECAUSE THE CHANGES ARE EFFECTIVELY IMPLEMENTING NATIONAL

PRACTICES IN PLACE OF LOCAL ONES, THESE ‘NEW’ RULES ARE ACTUALLY

FAMILIAR REQUIREMENTS IN SOME WAYS.”

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The Rule allows a debtor up to one year to (le an objection to the Notice of Postpetition Mort-gage Expenses, Fees, and Charges. In what would appear to be a direct con/ict with the Rule, the Western District of Pennsylvania im-plemented Local Bankruptcy Rule )$$#--(b), e*ective March %, #$%#, reducing the debtor’s objection period from % year to #% days. The fu-ture may bring more local variations on these national rules. Brice, Vander Linden & Wernick collects and analyzes all local rules and orders on a monthly basis, allowing us to monitor trends and con/icts that may a*ect our work and our clients’ practices.

A notable requirement of both the payment change notice and the postpetition expense no-tice is that signers of the documents declare un-der penalty of perjury that the information pro-vided in a notice is “true and correct to the best of [their] knowledge, information, and reason-able belief.” To this end, it is critical that the creditor provide the individual signing the docu-ment with su!cient, reliable, and supportable detail and evidence in order to appropriately make the declaration when a!xing his or her signature to the notice.

The last obligation to disclose that is pre-scribed by the Rule compels mortgage creditors to acknowledge and respond to a debtor or trust-ee’s (led Notice of Final Cure. Unlike the other notices, this is a responsive action rather than one initiated in the (rst instance by creditors. In practice, Notices of Final Cure are occurring at two bankruptcy milestones. The (rst occasion is

when the Chapter %) trustee has completed all payments related to curing of the pre-petition arrearage on the original proof of claim. This may or may not be near the end of a bankruptcy case or the time of discharge. The second occa-sion when a creditor can expect a Notice of Final Cure to be (led is at the end of a case. This latter timing is analogous to prior practice of some trustees or debtors’ counsel to routinely (le a Mo-tion to Deem the Mortgage Loan Current. Under the Rule, a creditor is allowed #% days to respond from the date the Notice of Final Cure is (led. The response must advise whether or not the pre-petition arrearage has been paid, and whether any postpetition amounts, including monthly installment payments, remain outstanding. To the extent that the creditor’s response alleges that any pre-petition or post-petition amounts remain outstanding, the debtor must (le a mo-tion within #% days of the creditor’s response to the Notice for Final Cure. A"er the exchange of these disclosures, the bankruptcy court rules on the status of the mortgage account.

While the Rule and related notices described above appear onerous at (rst blush, the Rule is simple in its primary purpose—forcing the dis-closure of all postpetition activity related to a debtor’s mortgage. At its best, the Rule has the potential to aid all parties. By providing for shared information, it can create consensus about the status of a debtor’s mortgage. For cred-itors and debtors alike, this can make a Chapter %) bankruptcy discharge more meaningful and reduce costly confusion a"er bankruptcy.

Joe Lozano has been with Brice, Vander Linden &

Wernick, P.C. since 2003, most recently serving as its

Chief Bankruptcy Compliance Counsel. He currently

acts as the firm’s Managing Attorney, overseeing its

Foreclosure, Bankruptcy, and Litigation departments.

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REGULATOR ROUNDUPConsumer Financial Protection Bureau: Much Accomplished, and More to Come

BY KATHERINE PORTER

Illustration by Betty Rodriguez


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The Consumer Financial Protection Bu-reau (CFPB) is a youngster, particularly compared to venerable regulators like the Federal Trade Commission (FTC). Less

than one year ago, on July #%, #$%%, the CFPB le" its temporary refuge as part of the U.S. Treasury De-partment and became a separate entity (albeit under the broad umbrella of the Federal Reserve Board.) The CFPB acted rapidly in launching initiatives and has been engaged in a /urry of activity since the appointment of its (rst Director, Richard Cordray. A survey of the CFPB’s work-to-date suggests where it will likely focus its e*orts in the future.

Congress created the CFPB as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in July #$%$. Its enumerated purpose, set forth in Section %$#% of the Dodd-Frank Act, is to “seek to implement and, where ap-plicable, enforce Federal consumer (nancial law consistently for the purpose of ensuring that all consumers have access to markets for consumer (nancial products and services and that markets for consumer (nancial products and services are fair, transparent, and competitive.” The statement emphasizes “markets,” which suggests that Con-gress wants the CFPB to take account of the impact of its activities on the real world.

The most well-known, and perhaps feared, power of the CFPB is to “take any action . . . to prevent a covered person or service provider from committing or engaging in an unfair, deceptive, or abusive act or practice under Federal law in connection with any transaction with a consumer for a consumer (nancial product or service, or the o*ering of a consumer (-nancial product or service.” Dodd-Frank sec. %$)%(b). Despite consternation about the word “abusive” as a major addition to prior laws’ references to “unfair or deceptive,” the CFPB has not yet used the word “abu-sive” as a guidepost in any of its lawmaking activities.

Section %$#% of the Dodd-Frank Act sets forth six speci(c functions of the CFPB:

Conducting (nancial education programs;Collecting, investigating, and responding to con-sumer complaints;Collecting, researching, monitoring, and publish-ing information relevant to the functioning of markets for consumer financial products and services to identify risks to consumers and the proper functioning of such markets;Supervising covered persons for compliance with Federal consumer (nancial law, and taking ap-propriate enforcement action to address viola-tions of Federal consumer (nancial law;Issuing rules, orders, and guidance implement-ing Federal consumer (nancial law; andPerforming such support activities as may be nec-essary or useful to facilitate the other functions of the Bureau.

In its (rst year, the CFPB has engaged in all of these tasks to some degree. A brief review of the CFPB’s major initiatives, however, suggests that the bureau is still spending much of its time on getting set up and ready to work. To date, the CFPB’s main projects have been creating mechanisms for transparency and for engaging the public in its work. For #$%#, however, the CFPB has clearly stated that it expects to be more active in formal lawmaking, including rule-writing, enforcement, and examination.

The CFPB has launched a major (nancial educa-tion initiative called “Know Before You Owe.” It has focused thus far on mortgage origination, dra"ing forms that satisfy the directive in Dodd-Frank to combine the disclosures required by the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into a single form. The CFPB has also worked on credit card disclosures and is soon adding student loans to the initiative. Two groups that Congress requires the CFPB to pay particular attention to are older Americans and ser-vice members. The CFPB has made prominent ap-pointments to head its o!ces serving these con-sumers, hiring former Minnesota Attorney General

“TO DATE, THE CFPB’S MAIN PROJECTS HAVE BEEN CREATING MECHANISMS FOR TRANSPARENCY AND FOR ENGAGING THE PUBLIC IN ITS WORK. BUT FOR 2012, THE CFPB

HAS CLEARLY STATED THAT IT EXPECTS TO BE MORE ACTIVE IN FORMAL LAWMAKING, INCLUDING RULE-WRITING, ENFORCEMENT, AND EXAMINATION.”

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Hubert “Skip” Humphrey III and Holly Petraeus, wife of General David Petraeus. Industries should expect the CFPB to continue to do consumer out-reach, research, and rulemaking initiatives on (-nancial products or practices that particularly impact older Americans and service members.

Dodd-Frank requires the CFPB to serve as a cen-tralized location for consumers to make complaints about (nancial products and services. In order to meet this requirement, the CFPB has rolled out its Consumer Response Unit in phases. The CFPB be-gan by taking complaints about credit cards and mortgages but has added several other products. The CFPB has stated that it expects to have the ca-pacity to handle consumer complaints with respect to all products and services within its authority by the end of #$%#. It plans to make complaint data, in redacted but raw form, available for analysis and review by the public.

The CFPB, like its predecessors, largely responds to complaints by forwarding the complaint to the business involved. Using a web portal, businesses must acknowledge the complaint within %- days and provide the CFPB with a response to the con-sumer within ,$ days. If a company misses these deadlines, the CFPB prioritizes the complaint for investigation. Additionally, the CFPB has adopted a robust de(nition of “relief.” Its Company Portal Manual states that a business can only report that a consumer obtained relief in response to a com-plaint if the business provided “objective, measur-able, and veri(able monetary value to the consum-er as a direct result of the steps you have taken or will take in response to the complaint.”

The CFPB’s research division is housed in the Research, Markets, and Regulations unit. This is a higher pro(le home than most (nancial regulators have given their researchers, suggesting that the CFPB may plan to use research studies as a founda-tion for rulemaking initiatives. For example, in its

(rst year, the CFPB did studies on credit scores and on remittances. In January #$%#, the CFPB pub-lished regulations concerning remittance trans-fers. These were the (rst substantive rules from the CFPB, which has largely focused its rulemaking to date on procedural concerns such as rules for dis-closing records and de(ning procedures for inves-tigations and adjudication proceedings.

As well, the CFPB has issued its Supervision and Examination Manual. This includes a module on Mortgage Servicing Examination Procedures, which describes the CFPB’s approach to identifying key risks to consumers in servicing operations, such as improper foreclosure practices and inaccurate pay-ment processing, and the types of information that the CFPB’s examiners will gather to evaluate ser-vicers’ policies and procedures. Because the CFPB has the authority to supervise non-bank enti-ties, all companies in the servicing industry should review the Mortgage Servicing Examina-tion manual to understand the CFPB’s ap-proach to assessing compliance with consum-er laws. The CFPB has not launched any enforcement actions, although its Semi-Annual Report says that investigations are underway.

Technology has been a key tool in the CFPB’s approach to all its duties. The CFPB has made ex-tensive use of new media, including social net-works, to reach consumers. Its webpage, www.consumer(nance.gov, bears no resemblance to a traditional government website, which usually features a patriotic theme and (ne print. One ben-e(t of the CFPB’s emphasis on technology is that industry actors have a number of e!cient tools available to keep up with the CFPB’s work. Savvy companies need not hope that they spot a notice in the Federal Register but can instead get elec-tronic updates directly from the CFPB on its ac-tivities. Stay tuned to the CFPB, as this is clearly the Washington regulator to watch.

Katherine Porter is a Professor of Law at the University of California, Irvine and

a nationally-recognized expert on consumer bankruptcy. At the time Ms. Porter

authored this article, she was providing outside consulting services to NBS and

Brice, Vander Linden & Wernick. On March 16, 2012, she was appointed by the

Attorney General of California to serve as the California monitor for the multi-

state mortgage settlement. She is no longer affiliated with NBS or BVW.

Section 1420 of the Dodd-Frank Act requires that creditors,

assignees, or servicers send the borrower a statement for

each billing cycle that must include, among other things:

the principal loan amount, the current interest rate, a de-

scription of any late payment fees and any prepayment fees

to be charged, and information about housing counselors.

The CFPB has suggested that the statement could be de-

livered in paper or electronic form, offering potential for

cost-saving delivery via email. There is an exception to the

requirement of periodic statements if the consumer is giv-

en a payment coupon book that contains the same informa-

tion in it.

Dodd-Frank requires the CFPB to develop a model version

of a periodic billing statement. This is one of several provi-

sions of Dodd-Frank that require the CFPB to redesign exist-

ing disclosures or create new disclosures. Earlier this year,

the CFPB launched a “Know Before You Owe” initiative that

focused on combining the current TILA and RESPA disclo-

sures into a combined, stream-lined statement. In that pro-

cess, the CFPB engaged in several rounds of consumer test-

ing and also released various versions of the forms to the

public for feedback. These efforts were all part of the CFPB’s

initiatives to engage early and often with consumers, rather

than relying solely on the formal notice-and-comment rule-

making process.

The CFPB is bringing that same approach to the model

periodic statements. Consumer testing is in process, and the

public is invited to send the CFPB their thoughts on the

prototype model form by writing to MortgageStatement@

cfpb.gov. In its statement accompanying the release of the

form, the CFPB gives some indication that industry will have

some flexibility to deviate from the form: “After final publica-

tion of the rule and form, creditors, assignees, and servicers

will have some flexibility to tailor the model form to work for

their needs and the needs of their customers.” Industry ac-

tors may reduce the need to make such changes by engag-

ing now with the CFPB on its prototype.

The prototype uses boxes and headings to group related

information. The goal seems to be to ease the consumer’s

task of finding all the information pertaining to a particular

aspect of the loan by putting it in a single place. The design

uses headings to describe the content of the boxes. For ex-

ample, one box is titled “Current Payment Due,” while an-

other is titled “Account Information.” As required by statute,

the form provides the current interest rate as well as how

long that rate will be valid. It takes the same approach with

prepayment penalty, showing “Prepayment Penalty (Until

September 2014) $3,500.00.” Dodd-Frank does not require

disclosure of prepayment information but does provide the

CFPB with the power to write regulations that require ad-

ditional information to be included in periodic statements.

A section of the prototype form called “Transaction Activ-

ity” is basically an excerpt of the loan history for the prior

month. It shows payments received and any fees charged.

Below that, a table titled “Past Payments Breakdown” shows

the allocation to principal, interest, escrow, and fees of the

past month’s payment. A parallel column gives that same

detail for all payments made during the year to date. Ser-

vicers would presumably need to fit any charges into one of

the four categories on the form: principal, interest, escrow,

and fees. Presumably, if the prototype or something similar

is adopted, servicers could not use categories or descrip-

tions such as “miscellaneous” or “other.” The prototype form,

however, would not require servicers to itemize and label

each past fee. That detail would be given when the fee is

assessed. The prototype form, for example, shows a “Late

Fee (charged because payment was received after

3/15/2012)” in the “Transaction Activity” box. The informa-

tion in parentheses provides consumers with the basis for

assessing the fee.

The prototype statement has a box for “Important Mes-

sages.” Dodd-Frank requires that the periodic mortgage

statements provide information about housing counselors,

and the prototype form satisfies that requirement with a

CFPB Tackles Monthly Mortgage Statements


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statement beginning with the bold heading “If

You are Experiencing Financial Difficulty” at

the top of the “Important Messages” box. Con-

sumers are referred to the U.S. Department of

Housing and Urban Development’s website to

locate a counselor but are also told to flip over

the statement to find “contact information for

three state- or federally-approved counseling

programs in your area.” The goal is presumably

to reduce the burden on consumers in finding

help and to motivate them to get assistance

quickly if they believe they are at risk of default

on their home loans.

Given the emphasis on using technology to

manage customer inquiries, industry may ap-

preciate the prototype form’s section on

reaching a consumer’s servicer, “Contact Us.”

It contains a place for the servicer’s phone

number and website but refers consumers to

the back of the form to locate a mailing ad-

dress. This display of information could en-

courage consumers to call or use the web to

reach their servicer, rather than mailing a letter.

At its best, the redesigned form will also re-

duce contact with servicers in situations when

a consumer simply needs basic loan informa-

tion or cannot read their monthly statement.

In its early days, the CFPB has emphasized

that it believes that giving consumers better

information can improve the marketplace for

financial services and reduce the need for

back-ended solutions such as enforcement

and rule-writing. The periodic mortgage state-

ments provide an early test of the CFPB’s

prowess at designing forms and working with

industry, advocates, and consumers to build

better disclosures.

DRAFT$351,569.29

Account InformationProperty Address 4700 Oak Ridge Ln

Bethesda, MD 20814Outstanding Principal $264,776.43Maturity Date September 2039Interest Rate (Until October 2012) 4.75%Prepayment Penalty (Until September 2014) $3,500.00

Contact UsBy Phone: 1 800 555 1234Online: www.springsidemortgage.comSee back for mailing addresses

Adam and Mary Jones4700 Oak Ridge LnBethesda, MD 20814

Past Payments BreakdownPaid Last Month Paid Year to Date

Principal $384.93 $1,150.25Interest $1,049.60 $3,153.34Escrow (Taxes and Insurance) $235.18 $705.54Fees $0.00 $0.00Total $1,669.71 $5,009.13

Transaction Activity (2/20/2012 �– 3/19/2012)

Date Description Charges Payments

3/16/12 Late Fee (charged because payment was received after 3/15/2012) $160.003/17/12 Payment Received �– Thank you $1,669.71

Springside Mortgage8100 Market AveBethesda, MD 20814

Amount DueDue By 4/1/2012: $1,829.71

If received after 4/15/2012: $1,989.71

Please designate how you want us to apply anyadditional funds.Additional Principal $ .Additional Escrow $ .Total Amount Enclosed $ .

Mortgage StatementStatement Date: 3/20/2012

Springside Mortgage

Springside Mortgage

Important Messages

If You Are Experiencing Financial Difficulty: If you would like mortgage counseling or assistance, you can find a list of counselors inyour area on the U.S. Department of Housing and Urban Development's website at www.hud.gov. On the back of this page, we havealso provided contact information for three state or federally approved counseling programs in your area.

We are pleased to have you as a Springside Mortgage customer. We are known throughout the country for the quality of our serviceand our dedication to providing financial security for our customers. We will do everything we can to make you feel at home, and toensure you receive the friendly, professional service you deserve.

Account Number 1234567

Payment Due Date 4/1/2012

Amount Due $1,829.71If payment is received after 4/15/12, pay $1,989.71

Current Payment DuePrincipal $386.46Interest $1,048.07Escrow (for Taxes and Insurance) $235.18Regular Monthly Payment $1,669.71

Total Fees Charged $160.00Total Amount Due $1,829.71

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“MORTGAGE SERVICERS CAN REVIEW THE STATEMENT AND CONTACT

THE CFPB TO OFFER THEIR INSIGHTS ON THE FORM’S DESIGN AND ANY

IMPLEMENTATION CHALLENGES IT MAY POSE FOR INDUSTRY.”

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DATA

< 100

200-300

100-200

> 300

D.C.

NATIONAL AVERAGE152.6

State Filings Per Capita

Percent Change1

Nevada 7.69 -3.41

Georgia 7.10 -0.82

California 6.2 -0.71

Tennessee 6.19 -1.67

Alabama 5.47 -1.69

Michigan 5.23 -1.47

Illinois 5.02 -1.23

Utah 4.92 -1.53

Arizona 4.73 -1.58

Kentucky 4.57 -1.03

State Filings Per Capita

Percent Change1

Alaska 1.10 -0.48

District of Columbia 1.40 -0.74

South Dakota 1.45 -0.99

Vermont 1.51 -1.11

South Carolina 1.54 -0.50

North Dakota 1.71 -0.76

New York 1.78 -1.06

Wyoming 1.81 -0.98

Montana 1.92 -1.11

Iowa 1.95 -1.26

DATA

State Households per filing

Percent Change1

Georgia 57.3 -5.6%

Tennessee 58.9 2.0%

Nevada 64.3 -20.5%

Utah 66.5 -4.8%

California 67.0 -15.2%

Alabama 73.0 -6.0%

Illinois 79.2 -4.8%

Michigan 81.9 -10.1%

Kentucky 89.9 -3.7%

Colorado 94.4 -5.5%

State Households per filing

Percent Change1

South Carolina 239.1 -2.5%

Iowa 246.3 -16.7%

South Dakota 251.9 14.1%

Maine 255.3 -16.8%

Wyoming 263.4 -7.2%

Montana 288.1 -23.6%

Vermont 289.3 -12.9%

North Dakota 320.1 -15.1%

Washington D.C. 321.1 -8.4%

Alaska 334.1 -5.9%

AS OF FEBRUARY 29, 2012; PERCENT CHANGE BASED ON COMPARISON OF JAN/FEB 2012 FILINGS VS PREVIOUS YEAR

2012 YTD STATE-BY-STATE HOUSEHOLDS PER FILING

TOP 10 BOTTOM 10BOTTOM 10

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STATE-BY-STATE TOTAL 2012 YTD BANKRUPTCY FILINGSAND PERCENTAGES OF CHAPTER 7 VS. CHAPTER 13

State Jan/Feb 2012 Filings Chapter 7 Filings Chapter 13 Filings

Alabama 4,145 40.0% 59.8%

Alaska 127 82.7% 17.3%

Arizona 3,575 82.9% 16.1%

Arkansas 1,907 54.9% 45.0%

California 30,857 72.3% 27.1%

Colorado 3,462 79.7% 20.2%

Connecticut 1,221 86.3% 12.9%

Delaware 537 61.8% 38.0%

Florida 11,956 70.6% 29.1%

Georgia 10,138 49.8% 50.0%Hawaii 421 76.2% 23.3%

Idaho 792 86.9% 12.8%

Illinois 10,003 71.2% 28.7%

Indiana 4,247 67.9% 32.0%

Iowa 828 90.6% 9.3%

Kansas 1,057 63.5% 36.4%

Kentucky 3,123 73.6% 26.2%Louisiana 2,189 30.3% 69.6%

Maine 356 83.4% 16.3%

Maryland 3,536 80.4% 19.2%Massachusetts 2,680 70.4% 29.0%

Michigan 7,746 83.9% 16.0%Minnesota 2,621 82.0% 17.9%

Mississippi 1,900 53.6% 46.1%Missouri 3,328 68.1% 31.8%

Montana 233 72.5% 26.6%

Nebraska 769 67.8% 32.1%

Nevada 2,564 76.7% 21.9%

New Hampshire 637 75.8% 24.2%

New Jersey 5,009 77.7% 22.1%New Mexico 747 91.2% 8.3%

New York 6,145 84.0% 15.8%

North Carolina 3,355 43.6% 56.0%

North Dakota 146 90.4% 9.6%

Ohio 7,175 73.7% 26.2%

Oklahoma 1,579 80.6% 19.2%

Oregon 2,000 75.5% 24.3%Pennsylvania 4,365 67.6% 32.1%Rhode Island 657 82.2% 17.5%

South Carolina 1,228 45.4% 54.3%

South Dakota 211 85.8% 13.7%

Tennessee 6,902 48.3% 51.3%

Texas 7,214 42.0% 57.7%

Utah 2,206 61.1% 38.9%

Vermont 148 86.5% 13.5%

Virginia 4,718 63.9% 35.9%Washington 4,097 79.6% 20.1%

Washington DC 131 84.0% 15.3%West Virginia 605 86.6% 13.2%

Wisconsin 3,285 74.8% 24.9%Wyoming 141 77.3% 20.6%

Total States and DC 179,019 68.2% 31.4%

2012 YTD as of February 29, 2012.

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INGOD WETRUST

LIBERTY

2,5

00

,00

0

2,2

50

,00

0

2,0

00

,00

0

1,75

0,0

00

1,50

0,0

00

1,25

0,0

00

1,00

0,0

00

75

0,0

00

50

0,0

00

25

0,0

00

07

06 05 04 03 02 01 00 99 9

8

45%

25%

5%-1

5%-3

5%-5

5%-7

5

1978-1987 1988-1997

YEAR ACTUAL GROWTH

2006 573,203 -71.9%

2007 801,840 39.9%

2008 1,064,927 32.8%

2009 1,407,788 32.2%

2010 1,530,078 8.7%

2011 1,353,186 11.6%

INGOD WETRUST

LIBERTY

2,5

00

,00

0

2,2

50

,00

0

2,0

00

,00

0

1,75

0,0

00

1,50

0,0

00

1,25

0,0

00

1,00

0,0

00

75

0,0

00

50

0,0

00

25

0,0

00

87 8

6 85 84 83 82 81 80 79 78

45%

25%

5%-1

5%-3

5%-5

5%-7

5

INGOD WETRUST

LIBERTY

2,5

00

,00

0

2,2

50

,00

0

2,0

00

,00

0

1,75

0,0

00

1,50

0,0

00

1,25

0,0

00

1,00

0,0

00

75

0,0

00

50

0,0

00

25

0,0

00

97

96 95 94 93 92 91 90 89 88

45%

25%

5%-1

5%-3

5%-5

5%-7

5

INGOD WETRUST

LIBERTY

1 1

10 09 08

2,500,0

00

2,250,0

00

2,000,0

00

1,750,0

00

1,500,0

00

1,250,0

00

1,000,0

00

750,0

00

500,0

00

250,0

00

45%

25%

5%-1

5%-3

5%-5

5%

-75

2008-20111998-2007

BANKRUPTCY FILINGS(BY DECADE)

Source: LCI 1/11/2012

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108

.8

80

.8

71.572.0

59.2

0

30

60

90

120

116.9

BANKRUPTCY RATE PER HOUSEHOLD POPULATION

SOUTH (WEST)

SOUTH (EAST)

PACIFIC

NORTHEAST

NORTH CENTRAL (WEST)

NORTH CENTRAL (EAST)

MOUNTAIN

1/1/2011 TO 12/31/11

NUMBER OFHOUSEHOLDS

PER FILING

NATIONALLY

1 IN84.7

HOUSEHOLDS FILED BANKRUPTCY

(BY REGION)


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Most of the time, your path to maximum performance is clear. When you want to maintain your health, you schedule an appointment for a physical with a doctor. If your car is not running properly, you take it to a mechanic for a tune-up. But where do you go if you want a professional review of your bankruptcy portfolio? Make an appoint-ment with us at National Bankruptcy Services (NBS). We o*er an analysis designed to give your company strategies to boost perfor-mance and avoid future problems.

NBS has developed an in-depth audit program that can be tailored to meet any lender, collateral type, or speci(c areas of bankruptcy matters. With our national footprint, we are able to use our vast ex-perience and bankruptcy expertise to help businesses identify areas of opportunity. We also identify ways that our expertise can help resolve any identi(ed areas of concern. With an NBS audit, we are your partners in improving performance.

What does this audit process look like? It begins with your company providing NBS a random sample of

bankrupt accounts that you have processed under current proce-dures. The size of the audit pool can vary, depending on your port-folio size and collateral make-up. The pool should include all ap-plicable chapters of bankruptcy and have a good representation for each type of product the company services. NBS has expertise in designing an audit sample that will permit a thorough review.

Once the audit pool is established, NBS conducts a (le level review of each account using data received from your company and data that NBS obtains from each (ler’s bankruptcy case records. Although NBS can custom-design audits for any speci(c requests or concerns, our overview process typically includes certain items for bankruptcy cases.

CHAPTER 13 BANKRUPTCIES

Proof of Claim Processing: Proofs of claim (POCs) are a critical step in the overall process for a Chapter %) case. The POC serves as the creditor’s submission to the court that a speci(c lender is owed money and has a secured interest in the debtor’s property. Based on its research, NBS has developed a detailed checklist for POC review. It includes the following items:

Claims !led before bar date: The (rst step to navigating the POC process successfully is ensuring that the document is on the

claims register before the claims bar date. Usually, the court es-tablishes the bar date at the onset of the case. If the claim is not (led with the court before this date, it is at risk of not being paid.Accuracy: Did the claim appropriately report the debt owed to the creditor? Was the outstanding balance correctly broken down to communicate fees, interest, and other charges as required by na-tional and local rules in that court?Attachments: When reviewing POCs, NBS also veri(es that the appropriate supporting documents were (led with the claim. This includes a review of the security instrument and related attach-ments. NBS maintains a detailed and up-to-date analysis of the applicable requirements by collateral type, jurisdictional require-ments, and changes to bankruptcy rules.Rule "#$%: In #$$', bankruptcy courts implemented Rule +$)'. That rule was enacted to protect personal identi(able information of debtors from being displayed on court dockets. The rule speci-(es four pieces of data that cannot be displayed in a POC; NBS reviews each claim to determine compliance and help your busi-ness avoid investigation or litigation.Plan Review and Collateral Evaluation: In addition to the

proper (ling of proofs of claim, a NBS audit includes a careful re-view of debtors’ plans and your business’s subsequent negotiation of debtors’ proposed plan treatment. This check is vital to the health of a bankruptcy portfolio because it critically a*ects recov-ery. What a creditor is entitled to receive in Chapter %) varies de-pending on jurisdiction and collateral type. To ensure the maxi-mum return in bankruptcy, a business must aggressively negotiate and sometimes litigate debtors’ proposed plans. To do so, it must know what standards to use for negotiation e*orts. NBS has the detailed knowledge of law and practice in jurisdictions across the country to conduct a thorough audit of how your claims are being treated and to identify possible opportunities to enhance recovery.

This process includes an examination of the collateral’s value in each case, as well as issues of adequate protection payments, pre-petition arrears, order of distribution, and percentage to be paid to the unsecured portion of claims. All of these items make a contribution to the overall success of recovering payment on a bankrupt account.

CONDUCTING A THOROUGH PORTFOLIO HEALTH CHECKDIAGNOSIS AND PROGNOSIS

BY WESLEY WILEY

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Payment Servicing: A timely and accurate claim and bene(cial treatment under a debtor’s plan are crucial, but without proper track-ing and application of payments received during bankruptcy, cred-itors can see their overall recovery limited and their costs for bank-rupt accounts soar. During the NBS review process, we break down payment compliance into two di*erent views:

Trustee Pay Cases: The majority of payments processed in Chapter %) cases will be distributed by the appointed trustee. Even though there is a neutral o!cial presiding over the estate, creditors have the responsibility to ensure that the trustees are receiving proper disbursements in a timely manner from customers and that the trustee is remitting appropriate amounts to you. Direct Pay Cases: In some instances, contractual payments will be received directly from your customer. Due to the intricacies of the bankruptcy process, convincing customers to make a payment can be a di!cult proposition for the creditor. NBS will examine how you communicate with your bankruptcy customers and how you process direct payments.Litigation: In its review of the above items, NBS also considers

any litigation that has occurred on the accounts. Its analysis looks at both the quantity of litigation and its type. How many motions for relief are being (led, and what impact did that have on the portfolio’s delinquency rate? How many objections to the company’s proofs of claim are (led? Is there an internal process that is causing this extra expense? All of these items are captured, analyzed, and calculated into an annual expense, allowing your business to measure the ben-e(ts and costs of changing your bankruptcy processes.

CHAPTER 7 BANKRUPTCIES

Reaffirmation Production: At NBS, we place a high value on reaf-(rmation agreements because we know that they have valuable down-stream impacts on your recovery a"er bankruptcy. In its review pro-cess, NBS not only examines the number of agreements (led but also veri(es that these agreements were (led in a timely manner, accurate, and submitted on the correct forms. This compliance helps maximize your recovery on rea!rmation agreements by avoiding litigation.

Litigation: In #$$-, the Bankruptcy Abuse Prevention and Con-sumer Protection Act (BAPCPA) introduced a new concept for ob-

taining collateral, o"en referred to as “stay li" by operation of law.” If applicable, this process lets creditors take possession of their property and liquidate it without incurring the expense and delay of stay-relief litigation. In its audit, NBS analyzes the portfolio to validate the use of this process and to compare it with conven-tional methods of recovering collateral such as motions for stay relief. Our focus is on identifying opportunities for you to reduce costs and recover more quickly.

COMPREHENSIVE COMPLIANCE

Forms: NBS reviews all documents that were (led with a court in its audit process. In the current environment, forms change fre-quently. To reduce delays and avoid litigation challenges, it is im-portant for creditors to ensure that they are using the proper forms for each jurisdiction.

Adverse Actions: Practicing in bankruptcy courts can be dif-(cult. Even small mistakes can lead to a creditor facing challenges from debtors’ counsel, trustees, the United States Trustee Program, or judges. In its audit, NBS identi(es areas where you may be vulner-able to potential legal challenges, focusing both on your company’s speci(c processes and on national trends that evolve to create new compliance issues. We go beyond just identifying possible issues to o*ering concrete and practical solutions that can reduce your com-pany’s risk pro(le.

Once the data is analyzed at a (le level, NBS develops a compre-hensive report on the audited portfolio. This document provides a portfolio overview that includes key metrics around the success or opportunities of each area of the audit. The overview document also provides approximate industry averages as well as typical bench-marks that NBS achieves in those speci(c areas of practice. These data points are used to help you see the bottom dollar impact of your current practices—and possible changes–on your portfolio.

Take a proactive approach to your portfolio. NBS can help prevent problems and keep your business running smoothly with an audit. We can diagnose areas of concern and o*er you a roadmap to cost-e*ective solutions for prevention.

For a free portfolio help assessment, please contact us at !"#.$$%.#!%# or [email protected].


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Debra Miller is the current President of the National Association of Chapter Thirteen Trustees (NACTT). Since 2000, she has served as the Standing Chapter 13 Trustee for the Northern District of Indiana, Fort Wayne and South Bend division. She is the former chair of the NACTT Mortgage Committee and has testified before Congress about mortgage servicing in bankruptcy cases. She earned her J.D. from Cleveland Marshall College of Law.

THE LEDGER: As President of the orga-nization, tell us about your background with the National Association of Chapter Thirteen Trustees (NACTT).

DM: I was appointed a Standing Chapter %) Trustee in July #$$$, elected as an at- large board member of NACTT in #$$&, and then elected as Treasurer in #$$'. I have served as the Chair for the Mortgage com-mittee, a member of the EOUST/NACTT Liaison committee, and served as one of the peer reviewers for the other trustees throughout the country.

THE LEDGER: What are NACTT’s priorities or major projects this year?

DM: As always, our top priority is education. We believe that NACTT should act as an in-formation and communication resource to advance education, leadership, and im-provement in the bankruptcy system. This year, as part of the Mortgage committee, we are working on best practices for the imple-mentation of amended Federal Rule of Bank-ruptcy Procedure (FRBP) )$$% and new FRBP)$$#.%

THE LEDGER: The rule changes that you mention became e*ective on December %, #$%%. It is still early, but how do you think those rules [FRBP )$$% and )$$#.%] are working on the ground?

DM: I think that they are an e*ective tool for the servicers, trustees, and debtor’s at-torneys to help ensure that the debtor re-ceives their fresh start at discharge by mak-ing sure all parties are aware of the status

of the mortgage. As usual, there are some speed bumps to work out. Five years from now, however, the system should be in place to make sure that there are no unknown is-sues with a debtor’s residential mortgage a"er discharge.

THE LEDGER: Do you have any advice for servicers working to comply with FRBP )$$% and )$$#.%? Are there any pitfalls that you think are being missed right now that you see coming in the future?

DM: I think that to the extent that there are fees, costs, or servicer-paid unescrowed taxes or forced placed insurance that were outstanding on a mortgage prior to Decem-ber %, #$%%, the servicer needs to include those amounts in the (rst %.$-days notice (led with the court. By being pro active and advising of those issues and amounts due before the end of the case, the servicer will allow the debtor and trustee to resolve them well in advance of the end of the case. With-out proper notice or with a delay to the end of the case, as has occurred in the past, a servicer has sometimes been required to waive those amounts.

THE LEDGER: You and your sta* have a policy of reviewing every mortgage proof of claim. What are the aspects of those claims that your o!ce challenges most frequently or believes may not meet the legal require-ments for a properly (led claim?

DM: The escrow analysis is the most chal-lenged. It is followed closely by insu!cient or missing documentation to show that the

Taking the StandM

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AN INTERVIEW WITH NACTT PRESIDENT DEBRA MILLER

INTERVIEWER: KATHERINE PORTER

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entity (ling the claim is entitled to be paid. In this era when some homeowners have delinquent payments in excess of a year, it results in an inaccurate calculation to merely take the monthly payment times the number of months behind. That amount may include a shortage amount, and doesn’t adjust for changes in the taxes or in-surance because the amount used is only the projected amount. We (nd that erroneous calculations are about as o"en in favor of debtors as in favor of creditors.

To meet the requirements of cure and maintain, the cure amount should be calculated as follows:

Amount due and owing for actual taxes, PMI, and insurance paid prior to the date of (ling;Amount of fees, costs, or foreclosure due and owing as of the date of filing; Principal and interest due to the date of filing to make the mortgage current; Amount that should have been in the escrow account as of the date of (ling to properly pay the taxes, insurance, and PMI during the next RESPA cycle (The RESPA analysis of the shortage should be done as of the date of (ling).

A"er summing these amounts, the total should be reduced by the amount of funds in the suspense account waiting to be applied to the debtor’s account.

THE LEDGER: In your role as Chapter %) Trustee, what are the biggest challenges you see facing debtors in trying to complete their plans?

DM: Job stability would probably be the biggest challenge. If a debtor has a stable job with stable income, the plan is much more likely to succeed. Add a wage order to the case of a stable employ-

ment debtor, and I think you have a situation where most debtors will succeed.

THE LEDGER: You’ve been a trustee for over a decade. Can you tell us about the changes that you’ve seen in the system since you began? We would love to hear one “change for the better” and one “change for the worse.”

DM: Gosh, you are making me feel old! I think the answer is the same for both questions: BAPCPA. I think that the means test is a great tool for the above-median income debtor who has unrealistic budget expenses and allows the debtor’s attorney, trustees, and courts to use the (ndings to require them to pay what they should. The change for the worse would be the so-called +%$ car rule that now requires a debtor to pay the full principal balance on a vehicle loan if the car had been purchased +%$ days or less before the bank-ruptcy (lings. Many times we see a %$- or %#-year-old vehicle that was purchased about a year before the debtor (led bankruptcy, with the result that the debtor is required to pay #$$-)$$% of the car’s value to a buy-here, pay-here dealer for a car that won’t last the entire bankruptcy.

THE LEDGER: Bankruptcy practice is your second career. Please tell us about being a Special Agent in the Secret Service and how that job may inform your work as a trustee.

DM: I served as a Special Agent from %+.& to %++$ in the Cleveland Field O!ce. My specialty was white-collar crime, wiretaps, and com-puter and bankruptcy fraud. I was involved in a number of large investigations that required me to si" through copious amounts of documentation to understand the situation. That experience, com-bined with my training and experience in interviewing and inter-rogations, have served me well as a trustee.

“WE FIND THAT ERRONEOUS CALCULATIONS ARE ABOUT AS OFTEN IN FAVOR OF DEBTORS AS IN FAVOR OF CREDITORS.”


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NBS SYSTEM

CLIENT SYSTEM

PROOF OF CLAIM PROCESSING

» Verify Information Received Systemically

» Review Jurisdictional Requirements and Systemic Constraints

» Open Impediment as Needed

» Track and Clear Impediments

» Compile Proof of Claim

» Operational Quality Control Review

» Automatic Upload on Required Forms

» Attorney/Legal Review

» Electronic Filing

» Imaging and Archiving of Records

» Compliance Monitoring

» Client Website Interface Offering Visibility into All Processes

PLAN REVIEW

» Review Debtor’s Schedules, Statements, and Plan

» Determination of Plan Treatment and Feasibility

» Identification of Plan Type

» Identify Abuse or Inadequate Treatment Issues

» Recommendation on Actions on Inadequate Plan Provisions, in Conjunction with Jurisdictional Tables and Client Matrixed Authority

» Object or Litigate as Necessary

» Client Website Interface Offering Visibility into All Processes

TRUSTEE DATA

ELECTRONIC DOCKET MONITORING

COURT DATA

+

RULES ENGINE

LASER FICHE

QUALITY CONTROL APPLICATION

DOC PREP

PACKAGE BUILDER

ELECTRONIC CASE FILING

IN DEPTH

OUR MISSION IS SIMPLE. We strive to improve the bot-

tom line performance of our clients’ bankruptcy portfolios

through careful, efficient, and client-specific management of

each individual case.

NBS provides nationwide bankruptcy management services

to the following types of organizations:

* Residential Mortgage Lenders

* Automobile Finance Companies

* Banks and Financial Institutions

* Consumer Lending Organizations

* Portfolio Servicers, Owners, and Investors

NBS is a leader in bankruptcy servicing for the consumer

finance industry. NBS is a subsidiary of Advent International.

ABOUT NBS

WWW. N B S D E FAU LTS E RV I C E S .CO M

NBS LAUNCHES PROCEEDINGS A PERIODIC PERSPECTIVE ON BANKRUPTCY SERVICING

Developed and published by a panel of NBS bankruptcy experts, Proceedings features an assortment of quick hitting articles spotlighting the current events affecting bankruptcy servicing. The March edition spotlights the recent AG Mortgage Servicing Settlement and the new Consumer Bankruptcy Forms.Please be our guest and review the March edition of Pro-ceedings by visiting our home page and clicking on the

link in the NBS NEWS section.

If you’d like to receive future editions of Proceedings and other NBS newsletters, please submit your email address to the Newsletter Signup field on our home page.

NBS TRADESHOW PRESENCENational Bankruptcy Services has had a growing presence at industry trade shows in 2011 and 2012. Most recently, NBS exhibited at the MBA National Mortgage Servicing Conference in Orlando in February, the CBA Live 2012 in Austin in March, and the CCN 7th Annual Conference in Amelia Island in April. Look for us next at the Royal Media Auto Finance Risk Summit in Dallas May 7-8 and the Collection and Recovery Solutions 2012 Conference in Las Vegas May 9-11.

EXECUTIVE PERSONNEL UPDATE• Larry Buckley assumed the role of Chief Executive

Officer of NBS effective January 17, 2012.

• Dave McManus joined NBS as Senior Vice President of Business Development effective March 1, 2012.

• Jason Cramer joined NBS as Vice President of Mortgage Bankruptcy Operations on January 15, 2012.

• Brian Boles will be joining NBS as Senior Vice President of Bankruptcy Operations effective April 15, 2012.

BRICE, VINDER LINDEN & WERNICK UPDATEBrice, Vander Linden & Wernick, P.C., counsel for NBS, announced that Larry Buckley assumed the role of President and Managing Shareholder of the firm, Joe Lozano assumed the role of Managing Attorney for Litigation and Compliance, and Adam Womack joined the firm as Managing Attorney for Business Development and Customer Relations.

NBS NEWS DESK

To learn more about NBS and our free portfolio

help assessment offer, please visit our website and

watch our brief introduction video.

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The Ledger - April 2012

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