It seems like every day now I have someone calling in a panic, because the large investors are paying a visit to the mortgage lenders regarding their “real time” fair lending system. I hope you know that Optimal Blue has that all packaged up pretty for you.
This is Why Investors Are Paying You a Visit:
•Anyone who has a vendor must monitor that vendor with a high degree of due diligence and demonstrate that to the regulators. This is why you see the large banks that you sell to, paying you a visit. They have to demonstrate that you are doing what you are supposed to.
•Likewise, if you have TPO’s, Minis, Teams, etc. you have to perform the same due diligence process over them because you are responsible.
•It used to be that looking at loans after they close for fair lending was normal. If you are using fair lending software for after closing, it’s probably because that’s what you grew up on; but it will not serve you well now.
•Investors are looking for your compliance management systems for fair lending BEFORE a loan closes because they are responsible for your practices, if they buy loans from you. AFTER a loan closes the problem is there. Who wants that?
Here are some tips:
1. Have a workflow model that shows how you monitor for pricing disparity at the time of lock in and memorialize those results.
2. Demonstrate how the file is reviewed by compliance within 24 hours of lock.
3. Put audit controls in place to monitor policy and prevent mistakes.
4. Have access to a historical database (not old rate sheets) that can run your rate data live from that day in history.
5. Have a review process in your workflow for a prior to closing pricing/program review and data integrity check.
6. Organize this data in one system to use during an exam.
The results: You demonstrate good controls and you are left alone!