Video Blog: Overview of 5,000 Loan Officers and 42,000 Sites
24 March 2016
Compliance Topic: Other Employment or Self-employment of Loan Officers.

Outside employment /self-employment can benefit both the Company as well as the loan officer but can lead to serious complicance problems.

7 January 2015
Compliance Topic: Does stale or outdated content pose a risk?

The content or disclosures were accurate in 2012 but are they today? Various laws apply directly and indirectly to this issue. (UDAAP, FTC, TILA, SAFE Act and RESPA) There are some specific state laws which

10 December 2014
Compliance Topic: How often should MLO use of social media be reviewed?

The (FFIEC's Guidance) leaves this to the Company: "A financial institution should have a risk management program that allows it to identify, measure, monitor, and control the risks related to social media." "The size and complexity of the risk management 

3 December 2014
Is this a valid testimonial?

FEDERAL TRADE COMMISSION 16 CFR Part 255 Guides Concerning the Use of Endorsements and Testimonials in Advertising address the application of UDAAP to their use in advertising.  An advertisement containing an endorsement relating the experience of a consumer on a central or key attribute of the service will likely be interpreted as representing the endorser's experience is representative of what consumers will generally achieve.

 

Endorsements by "actual consumers

26 November 2014
Compliance Topic: Are companies required to monitor all social media use of their loan officers on a continuous live time basis?

The FFIEC's Social Media: Consumer Compliance Risk Management Guidance specifically states: "Commenters also expressed concerns that this Guidance would require financial institutions to monitor all 

19 November 2014
What is your name?

Simple question…not so simple answer.  The NMLS Consumer site requires the name(s) used by the MLO.  The NMLS is very specific and has three additional designations for names:  1. Other Names; 

12 November 2014
What is in a Title?

There are doctors, lawyers and accountants; M.D.; Esq., and CPA.  These are clear, concise and denote an attained level of education and experience as well as a fiduciary relationship to the public and society itself. 

 

What about the title of the employee who originates residential mortgage loans? 

5 November 2014
Reverse Testimonials

A referral is the best type of lead. 

 

A Reverse Testimonial is a "thank-you" post or other recognition of a completed transaction written by or from the MLO (Employee).  A public recognition of the Employee's gratitude is a thinly veiled testimonial 

29 October 2014
Review Tip NMLS Consumer Site

When we conduct reviews for clients our Reviewers always pull up the NMLS Consumer site and view the MLO profile. This provides a great deal of information to assist our Reviewers.  The Reviewer starts with the name of the MLO.  He/she 

10 July 2014
Automatic

Tips, Thoughts and Practices is an email/blog from AcuClix© sent to mortgage compliance professionals.

 

This blog will provide some specific issues, thoughts and observations regarding the ever changing world of Social Media compliance. We hope you find this information useful. Thank you. Michael J. Wallace, Esq. Chief Compliance Officer, AcuClix©.

 

 

ISSUE: SAFE Act with Social Media and Websites.

 

The SAFE Act requires, among other things, that MLOS disclose their NMLS number on all marketing material. This has been further defined to include business cards, rate sheets, open house material as well as all printed material. This requirement also applies the use of social media and Websites. We have found in our inspections that websites do not have the NMLS number or it is sometimes buried in the small print.

 

Many MLOS use Linked IN and Face Book yet the majority we have inspected do not include the NMLS number. While it is not required, we believe a best practice would be to connect the NMLS number by hot link to the NMLS-R consumer site (some States require this Washington and Virginia among others).

 

The balance between business purposes and purely personal is very narrow. We believe that prudent practice dictates that all sites in which the MLO indicates his/her business relationship include the NMLS number.

 

There are various Social Media expanding which are "Free" and do not require input from the MLO. These include Zoom, Zillow and others. If the MLO has no control then the lack of NMLS number is not an issue.

 

However, be aware that the MLO can use these free services and add content. Once that occurs, there is a responsibility to include the NMLS number.

 

We hope you find this information useful. Thank you.

Michael J. Wallace, Esq.
Chief Compliance Officer, AcuClix©.

8 June 2014

Tips, Thoughts and Practices is a weekly email/blog from AcuClix© disseminated to mortgage compliance professionals.

 

This blog will discuss specific compliance issues, provide examples of non-compliance and tips for managing MLOS.

 

 

ISSUE: Unfair, Deceptive, Abusive Acts or Practices (UDAAP)

 

How do you know if an act by the MLO is UDAAP? This is a very subjective area of compliance. We have identified a few examples that we have identified in our reviews:

 

  1. MLO title: We have found "Branch Owner", "Partner", Counselor" and "Financial Planner", among others. There is an attempt to create the impression that that MLO is other than a person who sells mortgage loans.
  2. Appearing to be a separate licensed mortgage company: This occurs most frequently with MLOS working as a team. Many times there is a separate name and tag line. The connection to the licensed Company is not clear.
  3. Acting in the capacity of counseling and advising: We have found MLOS that appear to be acting in a "fiduciary" relationship.
  4. Misleading descriptions of loan programs: We find this with the Home Equity Conversion Mortgage (HECM). HUD requires a very clear and specific definition which is not set forth.
  5. Describing a mortgage as "wealth-creation" and using terms such as "debt-free", "eliminate debt" or other terms or phrases the appear to make using a mortgage (debt) to eliminate debt.
  6. Use of terms such as: "Government Benefit", "Government Program".

TIP: Some ideas you might use:

  1. Establish list of approved titles;
  2. Establish list of non-approved terms.
  3. Regularly inspect the social media use to ensure compliance

We hope you find this information useful. Thank you.

Michael J. Wallace, Esq.
Chief Compliance Officer, AcuClix©.

5 May 2014

Tips, Thoughts and Practices is an  email/blog from AcuClix© disseminated to mortgage compliance professionals.

 

This blog will discuss specific compliance issues, provide examples of non-compliance and tips for managing MLOS. This area is risk management and not perfection. The goal is to have in place policies, and procedures by which the Compliance officer is managing the risk associated with use of social media.

 

ISSUE: RESPA Section 8: The prohibition against kickbacks and unearned fees goes way back to 1974 with the introduction of the Real Estate Settlement Procedures Act (RESPA). This was among the first national acts seeking to impose compliance upon the mortgage industry. In the normal course of business MLOS establish close ties to realtors and other service providers. This does, however, lead to violations of RESPA. We have found potential violations in:

  1. MLO joint marketing materials with realtors;
  2. Discounts provided by using various service providers;
  3. Referral relationships with attorneys and other service providers;

TIP: Some ideas you might use:

  1. Provide written policy regarding joint marketing including:
    1. Pre-approval of relationship
    2. Pre-approval of all co-branded marketing material regardless of dissemination channel;
    3. Establish percentage of MLO cost based upon the space on the marketing piece. For example: if the MLO has half the page he/she should pay half the cost.
    4. Require proof of payment by MLO directly to marketing company/printer and not realtor.
  2. Review of origination sources, loan programs, type of borrower, specific rates and terms to determine if there is an unusual pattern or practice.
  3. Regularly inspect the social media use to ensure compliance

We hope you find this information useful. Thank you.

Michael J. Wallace, Esq.
Chief Compliance Officer, AcuClix©.

6 April 2014
Automatic

Tips, Thoughts and Practices is an email/blog from AcuClix© disseminated to mortgage compliance professionals.

 

This blog will discuss specific compliance issues, provide examples of non-compliance and tips for managing MLOS.

 

July 14, 2014

 

ISSUE: Truth in Lending Regulation Z

 

This concern keeps compliance officers awake at night. MLOS attempting to differentiate themselves by quoting rates and terms. We have seen many examples of non-compliance in our inspections which can subject the Company to large fines and adverse press. Generally these occur as follows:

  1. The MLO describes a scenario but does not include an APR;
  2. There is an APR yet there is no date nor limiting language which indicates that the described program is still available;
  3. It is an old site (post) that should be removed.

TIP: Some ideas you might use:

  1. Require MLO to regularly update sites and information;
  2. Disseminate standard limiting language to be added whenever the MLO discusses rates/terms and or loan products;
  3. Regularly inspect the social media use to ensure compliance

 

We hope you find this information useful. Thank you.

Michael J. Wallace, Esq.
Chief Compliance Officer, AcuClix©.