Know Your Truth … Compliance Is About Collaboration

As TRID preparations are either completed or very well underway, it’s time to take a brief sidestep in tandem with TRID rollout. It’s time for lenders to review the depth of their compliance not only internally, but externally with their chosen compliance provider as well and set those same expectations. With the myriad of changes and challenges this epic mandatory reform is demanding of lenders and providers, it is paramount that the complexity of compliance be fully comprehended and implemented into all areas of the lender organization throughout the loan life cycle.

There are key elements that should be taken into serious consideration to make an operation run more efficiently with compliance at the center. Most important is collaboration – more specifically between departments within a lender organization. By definition, collaboration is the cooperative arrangement in which two or more parties work jointly towards a common goal. Collaboration requires that one look not only at the outcomes of the efforts, but also at the process by which one arrives at those outcomes.

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With the lender in mind and that said, each department operates differently from sales, processing, underwriting, closing, funding. What should be happening is a cooperative meeting of the minds with every head of the individual departments and managers and those performing the work to find out how each impacts the other from an operational aspect. The compliance risk is then effectively minimized and/or eliminated completely. Additionally, the departments learn how they operate within the structure of the organization holistically.

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In some instances, a savvy organization will rely on their legal compliance provider to assist with the collaboration process whereby they spend consultative time with each of those departments within the lending institution and provide industry expertise, knowledge and guidance from a legal point of view – powerful collaboration internally and externally with all parties working together. “Know your truth” before someone like an auditor comes in. Know what is happening inside the organization and where the skeletons are – deal with them internally before an audit and work towards fixing them.

In summary, the following are questions every organization needs to ask of themselves and their provider to improve operations and eliminate risk: Is the true depth of compliance known within their organization and that of their providers? What is the depth of knowledge each department or provider has on the products, programs and processes and in each state? Can the compliance provider give legal guidance to the lender and consult with each department from processing forward through the loan life cycle? Has the provider’s compliance staff been processors, underwriters, funders or closers with years of experience? Can the compliance provider walk into a lending institution and streamline processes from department to department and improve collaboration and processes?

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