A mortgage compliance expert speaking at the Florida Association of Mortgage Professionals annual convention in Orlando made an analogy comparing
The document with the policies and procedures, said Jonathan Foxx, president and managing director of Lenders Compliance Group, is like a chassis of the auto. Their implementation is like the superstructure and training in them is like a car’s driver.
All three elements make a car safe to drive and they rely on each other for their existence, he continued, and the same is true of a mortgage company’s management and compliance with those polices and procedures.
Policies must be comprehensive, but also based on the size, complexity and risk profile of a particular company.
If a lender has an off-the-shelf, one-size-fits-all policy manual, the examiner might feel there is an “utter lack of concern” regarding compliance, and as a result could “dive deep” into evaluating how the company implements policies, he said.
Among the items state mortgage examiners are concentrating on is management effectiveness. Foxx said they are looking at the knowledge level of the management team and ownership and personnel and their commitment to the business.
Examiners are looking at how management responds to compliance deficiencies and potential regulatory violations. Another point of concentration is to what extent and how often training programs are being offered to the company’s staff. Foxx added that training does not have to be restricted to the topics mandated in mortgage banking laws and regulations. There are many items that loan officers need to learn which aren’t specifically addressed in the regulatory mandate regarding education and training, he said.
