Mortgage Lenders: Why and How to Build a Culture of Compliance

Compliance Matters for Mortgage Loan Originators

Here's a question for you MLOs: Why is it important to work in an environment where compliance is valued? Why does it matter to you? I mean, can't you just go out and do your job to the best of your abilities and call it good? Well, turns out, there are consequences for getting it wrong. But staying compliant on your own is tough. Working in an environment where compliance is taken seriously, and MLO's are given the resources to do it properly, can make all the difference. 

The Costs of Non-Compliance In the Mortgage Industry

It can be surprisingly easy to let compliance standards slide in favor of the time, effort, or money that can seemingly be gained from setting them aside. Every month it seems like there is a new scandal that engulfs a business sector because of lax decision-making or circumventing rules.

In the wake of events like the Equifax breach, it is worth noting that consumers and regulators alike care strongly about how information is handled, and that the backlash for failing to comply can be powerful; license revocation, massive fines, shuttered businesses, and even jail time depending on the offense. That's all to say, it's worth the effort it takes to stay compliant, not just because these laws were written to protect consumers and you have a duty to keep your borrowers safe, but also because it can cost you and your company dearly.

Building a Culture of Compliance

Setting up a culture of compliance is something that has to be done intentionally, and will require the input of attentive staff that is equipped with the resources necessary to make a difference.

3 Ways to Improve Mortgage Lending Compliance at Your Company

Stay Aware You and your fellow MLOs need to be up to date on regulatory actions, changes, and trends to avoid being caught off guard by regulatory actions. The Consumer Finance Protection Bureau (CFPB), the US Department of Housing and Urban Development (HUD), and your state regulators are all sources of information that should directly affect how you do your Job. (Of course, the Knowledge Coop Blog is a great resource too, not that we're biased.)

Get Educated Continuing Education is not something that should be ignored or pushed off. Things change all the time, and having 30 years of experience does not mean you are aware of everything that is happening now. Make sure you are up to date on your organization’s internal policies, and that the CE you take is actually fresh and relevant.

Use Systems Technological frameworks can help to integrate compliance practices into the everyday workflow. This can help with communication between LO’s and other departments, including announcements from the executive levels. The industry is exploding with tech-enabled tools to help you stay compliant. Consider tools like Velma and Optimal Blue for marketing help. Or training platforms like the Coop that enable easy compliance training and reporting, and provide your team access to content that helps to build and maintain a culture of compliance.

Take It From the Top: Compliance Leadership

A mortgage company that values compliance, both in words and in deeds, makes it possible for its originators to do well. In words: Clear and enforceable policies. In deed: the way managers act. Loan originators will be much more motivated to act compliantly if they know it is the expectation and leaders set a good example.