Per Fannie Mae’s Fair Servicing Best Practices, “Fair servicing includes an expectation that all borrowers are treated consistently and fairly throughout the loan servicing process.” Encompassed within this is communicating with borrowers, processing payments and refunds, assessing or waiving fees, and reporting to credit bureaus. The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction, including loan servicing.  Similarly, the Fair Housing Act prohibits discrimination in a wide range of housing related activities, including mortgage servicing. Other laws and regulations with fair servicing implications include the Dodd-Frank Act, the Fair Debt Collection Practices Act, and numerous state and local laws. These fair lending laws create the basis for regulatory expectations that financial institutions service consumers and customers fairly and equitably.

Asurity Advisors leveraged data analysis software platforms to review and analyze the bank’s loan data for each sub-servicer and conducted non-regression statistical analyses to test for disparities in servicing outcomes on a prohibited basis. Asurity’s analyses included assessing the quality of data provided by each sub-servicer and disparities in the propensity to receive favorable loan modification outcomes on a prohibited basis. Following the analysis, Asurity Advisors drafted executive summary reports that detailed potential disparities in loan modification outcomes by each prohibited basis group. This helped the bank identify areas for additional testing and review, and served as a starting point for further fair servicing analyses in the future.