Poor policies and procedures; The charging of improper fees; Non-compliance on borrower disclosures; and Non-compliance on record retention (not easily available and not legible).
A moment of humor came when the room broke out in laughter after one regulator said: “And no shredding or White Out allowed! One auditor asked a broker for files and when the broker disappeared to get the files, the auditor heard the shredder going in the next room!” When it comes to the attitude and psychology of regulators, they want you to know that state audits are really meant to help brokers and MLOs remain in compliance. They are not meant to be witch hunts. Their true purpose is to verify the quality of the originations. Technology is your friend, embrace it and use systems to help with compliance. Most MLOs leave compliance to their employer and going forward that just won’t do. Because there are fewer players, there will be more audits. Compliance will be stricter and there will be less tolerance and higher penalties. The coordination between states will be much easier. The regulators made a good point when they said “Get to know your regulator.” Attitude is everything and cooperation speaks to your intent to comply with the law. Every company, no matter what size or how much volume, must maintain policies and procedures. Calendars of employee trainings go a long way in an audit as does keeping the material trained used. If you are found guilty of any violations, I urge you to correct them immediately, and respond to regulators in a timely fashion. Pick one chief to respond that has data and authority. Above all, be respectful as these regulators hold your career in their hands! They suggest you resolve issues during the examinations, and if you have serious violations, you are best served by seeking legal counsel. When it comes to NMLS education, one issue everyone seemed to agree on was that most of the pre-licensing education offered will be for new entrants to the
business and 20 hours may not be enough. There were suggestions of somewhere between 40 and 60 hours being considered. Education needs have changed and educators must adapt. There was also discussion that perhaps a “gold standard” type certification might some day be issued by the NMLS. Providers should know audits have begun on live and online classes. State and national tests are updated regularly and providers should teach the most current content, and test-takers must take the rules seriously! “This is a high-stakes test,” said Pete Marks, vice president of national testing and education programs at the Conference of State Banking Supervisors (CSBS) Mortgage Division. At the time of the conference, there were 35 test violations resulting in 30 investigations. Yes, there were MLOs actually trying to cheat, and if you don’t like a particular question, there is even a process to challenge the test. I left the 2011 NMLS User Conference with a different mindset than when I arrived. The staff of the NMLS is making every effort to be transparent and work cooperatively with the mortgage industry to improve products and the marketplace. Education and testing is constantly being improved. Processes are constantly being evaluated. Regulators aren’t fooling around … they are flexible and will help licensees (their customers), but they expect to be treated with respect. There are processes in place to challenge the process and there are appeal processes for problems that may arise. The NMLS can be utilized in a positive way if we all work together and this is all new for everyone. The NMLS staff acknowledged that they may not get it right the first time, but they need and rely on feedback from licensees and regulators to make improvements and to consider changes for the future. Deb Killian, CRMS is a National Association of Mortgage Brokers (NAMB) board member and statewide president of the Connecticut Association of Mortgage Brokers (CTAMB). Deb is also Connecticut wholesale account executive for GMAC. She may be reached by e-mail at debkillian@snet.net.
Scenes From the 2011 National Association of Mortgage Brokers Mid-Year Meeting
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June 4-5 at the Crowne Plaza Valley Forge Hotel in King of Prussia, Pa.
Members of the NAMB 2011-2012 board take the oath of office: John Councilman, Walt Scott, Jim Pair, Linda McCoy, Don Frommeyer, Olga Kucerak and Mike Anderson
JUNE 2011
NAMB President Mike D’Alonzo presents the NAMB President’s Award of Merit to Denise Leonard for her work on behalf of the association
MICHIGAN MORTGAGE PROFESSIONAL MAGAZINE
NAMB President Mike D’Alonzo presents John Councilman with an NAMB President’s Award of Merit
NAMB Government Affairs Committee Chair Mike Anderson (right) accepts the NAMB President’s Award of Merit from President Mike D’Alonzo (left)
NAMB Past President Jim Pair presents the NAMB Presidential Pin to 2011-2012 President Mike D’Alonzo
NationalMortgageProfessional.com
NAMB President Mike D’Alonzo presents Ginny Ferguson with the NAMB Distinguished Industry Service Award