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Today's mortgage market has become so incredibly compliance-intensive that it's on top of every originator's list to ensure that they are adhering to the myriad and constantly changing statutory and regulatory requirements.
With the increase in statutory and regulatory changes, mortgages are subject to enhanced scrutiny from federal and state examiners and investors. This enhanced scrutiny can lead to more risk for the lender or broker in that noncompliance can result in the imposition of penalties and fines, borrower refunds, and/or the required repurchase of the loan from the investor. If any of these potential consequences were to become a reality, a lender or broker's profit margin would be further diminished.
One way that lenders and brokers can manage the risk of noncompliance is to ensure that mortgage documents used during the origination process are compliant with applicable federal and state laws. Partnering with a loan document preparation company that also provides a compliance function is one way to achieve this objective. Selecting the right document preparation provider can effectively manage your risk while simultaneously cutting costs and creating efficiencies, but there are many considerations to take into account when selecting a provider.
Compliance Department
To ensure a doc prep vendor provides compliant documents in its loan packages and has the ability to create and update documents quickly and on or in advance of the effective date, a well-staffed and experienced team of in-house lawyers, senior compliance specialists and support staff is essential.
Your vendor must have competent staff that can promptly analyze and synthesize legislative bills and adopted regulations and make required changes to its forms and documents. You should also consider the accessibility you have to members of the compliance department in case you have questions. Can you email them? Can you pick...