Given the rapid changes in the mortgage regulatory environment, up to date quality control measures that are in place and practice now will provide for a smooth annual recertification. Brokers, third party originators, mini-correspondents, non-depository lenders and depository lenders are being held to higher standards every year.
Agency regulations in conjunction with additional depository and non-depository lender requirements are changing the investor landscape. Due to the substantial increasing cost of compliance and risk of purchasing mortgage loans from various originating entities, investors are increasingly requiring the originating companies to perform the same compliance and quality control measures as they perform.
A simple quality control plan for mortgage companies is no longer enough. Quality control plans require constant updating and are an intricate and complex action plan for the compliance requirements for each loan type.
Investor recertification requirements are becoming much more complex than just providing evidence of pre and post-closing review reports. The requirements now include current financials, compensation agreements, deposit data reports (for depository lenders), LDP – GSA – OFAC checks, onsite visits, FDIC or NMLS information and/or other information that varies from one lender to another.
CFPB regulations that may apply to your company should be incorporated in your policies and procedures:
Regulation B – Equal Credit Opportunity Act
Regulation C – Home Mortgage Disclosure Act
Regulation G – S.A.F.E. Mortgage Licensing Act – Federal Registration
Regulation H – S.A.F.E. Mortgage Licensing Act – State Registration System
Regulation N – Mortgage Acts and Practices – Advertising
Regulation P – Privacy of Consumer Financial Information
Regulation V – Fair Credit Reporting Act
Regulation X – Real Estate Settlement Procedures Act
Regulation Z – Truth In Lending Act
Labor costs and resources to handle the full spectrum of mortgage compliance and annual recertification internally can easily be cost prohibitive. Just the research to stay current with new regulations, incorporate them into your quality control plan and policies and procedures is very labor intensive.
Utilizing a highly qualified company that specializes in quality control is an excellent cost effective resource to handle some or all of these requirements that are tailored to your organization.
NOW is the perfect time to prepare for your next recertification.