YOUR QUESTION
We are a small broker in the West. There are only four people in our company. We are licensed in three states. Every year, we get slammed with new compliance requirements from state and federal agencies. It's too much! Sometimes I think compliance is first and sales are second. Every year it gets worse and worse.
Surely there is a way to keep track of these regulations without spending a ton of money on search engines and lawyers. I don't know what I don't know, and that is the problem. You don't have to give me every chapter and verse about what to do. I just need some advice on what I can do, given my limited means and staff.
I need to get back to sales, but too much of my day is consumed by compliance.
So, please let me know how to stay ahead of changing regulations.
A Frustrated Broker
OUR COMPLIANCE
SOLUTION
We recommend:
BROKERS COMPLIANCE GROUP, the first full-service, mortgage risk management firm in the United States, specializing exclusively in outsourced mortgage compliance and offering a full suite of services to mortgage brokers, mini-correspondents, and independent mortgage professionals.
OUR ANSWER
I understand how you feel. It's the main reason why I started Lenders Compliance Group twenty years ago.
Our Brokers Compliance Group supports the unique compliance needs of mortgage brokers. We have hundreds of brokers who let us handle their compliance so they can focus on sales and operations.
Let me say this: there was a time, ages ago, when sales and compliance were separate activities, though they continually overlapped and coalesced. Now sales and compliance are cemented together. I know that's not what you want to hear, but it's true.
Our industry is highly regulated, but given the tally of federal and state restrictions, it is not as regulated as others. Mortgage banking is categorically grouped within the finance and banking industries. It is certainly amongst the most highly regulated industries in the country.
So, you will need to stay alert and proactive. However, there are several things you can do to reduce the time you give to monitoring and implementing regulations. It may seem daunting, but once you build momentum, you will be able to focus much more on sales.
To prepare for regulatory changes, you should develop a proactive framework. By "framework," I mean a plan to closely monitor regulatory changes and, where needed, assess their impact on your origination processes. This plan should include feedback to update policies, provide training, test the loan flow process, maintain documentation, use methods to track changes, and audit ongoing compliance. You'll continually tweak the plan over the years.
I'm going to
break it down for you so that you get a feel for what I'm suggesting.
MONITOR
Develop a means to monitor court cases,
enforcement actions, and regulatory bulletins. Because you have a small office,
designate colleagues to track these early signals.
RESEARCH
Join, subscribe, or partner with industry
associations and compliance advisors, such as Brokers
Compliance Group. These resources usually provide content, updates, and
specialized training.
TECHNOLOGY
Reduce research costs by using a
cloud-based platform to alert you to regulatory changes. If you do not have the
resources, you can partner with our compliance firm to get real-time feedback.
ASSESS & EVALUATE
Determine which business areas (for
instance, lending, technology, operations) are affected by new rules (such as
digital signage and AVMs). Identifying the impact strengthens compliance.
CONDUCT AUDITS
Perform internal audits or external audits to review your compliance management system. For a close look at a department, function, or regulation, use our inexpensive Compliance Tune-up.
