Policy, Procedures, and Examinations - Part II: Mortgage Bankers

by Jonathan Foxx
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The most common question my colleagues and I are asked by prospective clients is whether we provide the “full set” of policies and procedures for all of the mortgage acts and practices. Of course we do! But policies and procedures are only one aspect of the many risk management services my firm offers.

Nevertheless, policy statements seem to be ‘first and foremost’ when it comes to a client’s compliance needs.

Yet we do not often get questions such as the following:

How can we effectuate policies and procedures?

-What policies are the most important for us to adopt?

-Although we have policy statements, how often should we update them?

-Who would be in charge of maintaining and enforcing policies?

-How do we build policy statements into a Compliance Management System (CMS)?

-Which policy statements are important to our warehouse lenders?

-Which policy statements are important to investors and Regulators?

-Which policy statements are important to our servicing affiliate and subservicers?

-How can we prove that our policies are being adequately implemented?

-What are the key components of policies and procedures?

-What vendor offers the most professionally safe policy statements?

-How do we go about building our own policies and procedures?

-How often should we train our employees on our policies?

-Is there a self-assessment checklist that we can put into our policy statements?

-What is the best way to document our implementation of procedures?

-Is there a core set of policies that we absolutely must have at all times?

-Which policies require testing and auditing, either internally or externally?

-How do we stay up to date on regulatory changes that affect our policies?

-What method is preferred to review, adopt, and update policy statements?

-Do we have a sufficient budget for maintaining policies and procedures?

-What resources should we use to draft comprehensive policy statements?

-What is the best method to retire a policy that is no longer a regulatory requisite?

-Where should we go for guidance in those areas that are not yet fully regulated?

These are but a few of the many questions that a lender should be resolving.

In my view, we ought to get away from the thinking that considers policies and procedures to be a panacea for the effects of improper management, regulatory deficiencies, and trending defects. Policies are a continually changing, dynamic means to an end, but not the end itself. And they are only as good as the accuracy of their content and the efficacy of their implementation.

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IN THIS ARTICLE

UNASKED QUESTIONS

IMPRESSING THE REGULATORS

A WORD OF CAUTION

POLICIES AND PROCEDURES-MORTGAGE BANKERS

PREPARING FOR AN EXAMINATION

MORTGAGE RISK MANAGEMENT

WHO HAS THE EDGE: EXAMINER OR LENDER?

COMPETENT MANAGEMENT

EXAMINATION FINDINGS

POLICIES AND PROCEDURES-FINALE

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Written by:

Jonathan Foxx
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