Marketing Compliance Corner: Wholesaler Risk By Michael J. Wallace Esq. Wholesale lenders may be held responsible for various actions of their brokers, bankers and correspondents (brokers). The wholesaler, in establishing a relationship with the broker, is responsible for due diligence. For example, the wholesaler may approve title insurance agents, appraisal companies and determine that sound underwriting/processing standards are followed. By underwriting the file or reviewing the underwriting, the wholesaler minimizes its risk. There are costs as well as competitive reasons that prohibit the wholesaler from reviewing every single commercial communication of its brokers. The wholesaler may directly compete via its own retail channel, competition with other wholesalers or lack of resources, any of which can lead to vulnerabilities. Yet some level of due diligence is required of the wholesaler to ensure compliance by its brokers. What steps should a wholesaler take to minimize these risks? We suggest the following to reduce your exposure: 1. Provide compliant marketing pieces, social media posts and commercial communication directly to your brokers.
OCTOBER 2013 n Connecticut Mortgage Professional Magazine n
NationalMortgageProfessional.com
62
2. Inquire about the compliance management system (CMS) the broker has in place: a. Receive assurance that the broker actually uses the system; b. Obtain a copy of the CMS in place for marketing and lead production, review it, and if necessary, provide comments to the broker; and c. If there is no formal CMS in place, have the broker provide a written narrative as to how it operates regarding marketing and leads. 3. Provide a written policy to the broker regarding your expectations and requirements and have a copy signed by the broker for your files. 4. Establish a consistent review (maybe quarterly) of the processes to ensure that the company does follow its CMS. 5. Determine the following: a. Are the broker’s Web sites approved by state regulators? b. Determine the manner in which the company obtains its business, such as direct mail, telephone, social media, etc. c. Are loan originators allowed to have their own Web sites and social media sites? d. Are policies in place in regards to Web sites and social media sites? e. Are the loan originators or other broker employees allowed to have individual e-mail addresses (such as Gmail or Hotmail) or are they required to use company e-mails only? You can manage risk with your wholesale channel by implementing some or all of the provided suggestions. Please feel free to contact me with any questions or comments at (727) 474-0961 or e-mail mwallace@clixmg.com. Michael J. Wallace Esq. is president of CLIX MG. Marketing Compliance Manager (MCM) is a Web-based compliance management system for marketing and lead programs, including social media. For a 15-minute live demonstration, please visit www.clixmg.com. He may be reached by phone at (727) 474-0961 or e-mail mwallace@clixmg.com.
SPONSORED EDITORIAL
NAPMW REPORT O C T O B E R
2 0 1 3
What Does an NAPMW Membership Do for You? By Christine M. Pollard hat does a membership in the National Association of Professional Mortgage Women (NAPMW) do for you? This question is asked so many times to our members and I so often hear the same types of responses. Many members say it provides them the opportunity to network with others in the same industry; however, education is more often the top response. Education is provided at local monthly meetings, at regional meetings and at the National Education Conference each May. Additionally, there are several Webinars offered to our members throughout the month, with topics covering mortgage industry compliance and leadership to give our members an added benefit. So many leaders in our association say that being a member of NAPMW has helped them gain confidence and self-assurance. All of these things together make each one of us a better person, both personally and professionally. It has allowed many members to excel in their careers as leaders of the industry. As I sat down to write this article, I wondered what I could say to convince anyone of the value of being a member of NAPMW. Then the opportunity knocked during a communication with a fellow member. I congratulated Central New York member Jiuseppe Esposito, MML on his recent promotion to Underwriter II at NBT Bank NA. Joe is not only a member of Central New York, serving as a director on the Board, but he has been the Regional Technology Chairperson for the past four years and the National Technology Chairperson for the past two years. Joe replied, “I credit NAPMW in large part with developing the skill set that has allowed my confidence to grow. This has been noted by my management team on many occasions, underscoring the importance they place toward NAPMW in my personal and professional development.” That testimony was so timely. I have had the privilege of watching Joe grow and develop into the person he is today and it has been a true pleasure. NAPMW allows members to obtain education on all levels of the mortgage industry, as well as in professional development. This year, NAPMW launched a series of Webinars geared toward leadership. Regulatory updates are also scheduled for future Webinars. As a total volunteer organization, NAPMW works tremendously hard to be the premier provider of mortgage education for our industry. Be sure to check out the NAPMW Web site (www.napmw.org) for an education event near you. You are sure to find yourself welcome at any local meeting you attend or any Webinar you may join. Come for the education and stay for the friendship.
W
Christine M. Pollard, an operations representative with Investors Title Insurance Company from NAPMW’s Central New York Region, is national president-elect of the association. She may be reached by phone at (607) 226-1046 or e-mail cpollard1046@gmail.com.