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“Think List” #3-Logistics, Workflow and Monitoring!

“Think List” #3-Logistics, Workflow and Monitoring!

Regulations are changing fast and keeping up with them takes the right staff, coordination, communication and cohesiveness.  The days of the right hand not knowing what the left hand is doing, can cost you big money in today’s world.  “Think List” #3 helps you put into place, bullet-proof processes which demonstrate great compliance management.

Okay put on your thinking caps, this one may challenge even the best executives!

_____  Are you adequately staffed for compliance?  The best way to find out is to talk to those already in positions and to other mortgage lenders.  Good compliance people are hard to find so you do not want to burn out the ones you have!

_____  How do you track any changes with any regulation?  I am referring to a person or division in charge of watching regulatory changes related to any mortgage law or act.

_____  When something does change, how do you communicate this to any and all relevant parties?  Few are going to look it up and read the memo, so how will you track the training and comprehension of the changes?  The goal is that any personnel required to understand new information needs to be fully trained, and tested prior to the actual implementation.  Make sure you document the training, and testing for the examiners.

_____  How will you monitor the changes?  Let us assume a new change in regulation, where the staff has been trained and tested on the implementation.  How will you know that it is actually being done correctly? The goal is to put monitoring in place to identify any risk before the loan closes.

_____  Do you regularly talk with other mortgage professionals about how they do it?  More brains=better results.  Although this is a large industry, it is also quite small, so networking with others facing the same issue can help all of you.

_____  What does your complaint system look like?  There should be a rock solid workflow, an escalation process and customer response, which you can document and demonstrate to the examiner.  The examiners have said repeatedly, if you find a mistake remediate the client.  If not, they state they will require you to do it.

_____  How are you monitoring your TPO’s?  I have written about this several times, so if you need the information please let me know.  You will be responsible for their fair lending practices, so once again you will need to demonstrate your oversight to the examiner.

_____  How do you monitor your data before loans close to check for fair lending or disparate impact issues prior to closing?  Many of our clients are doing this successfully so if you need help, I am here.

_____  Are your management, training department or department heads a hindrance to your productivity?  Establishing time lines, assigning responsibilities and monitoring their completion will determine your ultimate success.  Even if you are a big company, times of fast paced changes like we are experiencing now, require you to think and move like a small company.

_____  Do your board meeting minutes reflect regular updates and education on your fair lending progress?  The CFPB examiners will expect the board to know what is going on in the company they oversee.

_____  How do you monitor and track every exception, both pricing and credit, and then compare that to similar borrowers?  Giving one client with a similar credit profile a different price or approval, versus another protected class client, will put you in jeopardy.

_____  How are you going to keep the positive momentum going within your organization with all of these changes?  Expanding markets=more employee attrition.

_____  Who will be your “go to” legal counsel and industry consultants for any issues or direction?  If these are not in place, now is the time to start the conversation, so that when something does happen you are prepared.

Who knew we would all need a large compliance staff and several “Lean 6 Sigma” graduates to properly run our business?


Tammy Butler, Master CMB

Author Tammy Butler, Master CMB

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