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Mortgage Industry Compliance Concerns and Best Practices [Recap]

By Rhonda McGill
May 10, 2022
mortgage compliance concerns and best practices

Last week, PerformLine hosted a mortgage industry roundtable that gathered mortgage leaders to discuss best practices for ensuring compliance and consumer protection as we continue into a year of increased regulatory pressure.

I always love hosting these roundtables, and I had a great time chatting with attendees. Here’s a recap of the top discussion points during the event, including managing loan officers who work remotely, increased conduct risk with decreased mortgage volumes, marketing and compliance on TikTok, and more.

Top Regulatory Concerns

We kicked off the discussion by asking participants what their biggest regulatory concerns are over the next six months to a year. 

A Fine Line Between “Loan Officer” and “Realtor”

One attendee talked about their company’s unique situation in which branches are partners of their organization. Because of this, they spend a lot of time managing various loan officers and branch managers, how they’re utilizing social media, and handling compliance. The challenge is helping these loan officers and branch managers succeed while also ensuring that they’re compliant.

Specifically, this attendee noted that they’ve recently been seeing a lot of people walking a fine line between “loan officer” and “realtor” on their social media channels. The challenge here is making sure that they catch these instances quickly and they ensure there’s a clear distinction between loan officers and realtors on social media. 

This attendee has been working closely with PerformLine on this to find any instances where loan officers are blurring the lines between their job and a realtor’s job and to get visibility into where this is happening to help mitigate potential risk.

Decreased Volume, Increased Conduct Risk

Another attendee talked about conduct risk concerns as volumes are decreasing, and this concern was echoed by the rest of the participants.

Since lenders work off of commission, they’re going to get more “creative” to try to get business as volume decreases. Attendees shared some “wild” stuff that they’ve seen from loan officers lately who are trying to stand out from the crowd, including:

  • Using FHA 203k loans in order to try to cover appraisal gaps
  • Wanting to talk about foreclosure options and how their organization can help—you need to be really careful with this because servicing has a lot of strict rules about what you can and can’t say about loss mitigation options
  • Unique requests coming from realtors working with loan officers to try to provide value adds, such as presentations on assumptions about the market

If you work in the FHA lending space, you also have HUD regulations that add an additional layer of risk on top of this.

All of these risk factors emphasize the importance of staying on top of your policies and procedures. Make sure you’re monitoring and understanding what’s happening in the various spaces to keep loan officers compliant and protect your organization.

Where To Register Lenders Who Work Remotely

Another concern that was brought up was around those who have lenders who are working remotely and aren’t based out of a specific branch—where do you register them? 

The MBA has worked with different states on this topic and new states are added every day that are not requiring loan officers to work from a branch.

Check out this resource from the MBA on remote work policies for lenders.

Social Media

Loan Officers on TikTok

It seems like every time we have one of these roundtables, TikTok always makes its way into the discussion. More and more loan officers and mortgage companies are taking advantage of this popular social platform.

One attendee shared that their organization is using TikTok on the corporate level, and has gotten over 365,000 views within the last 60 days. This resulted in a big increase in traffic to their website’s homepage. 

Another attendee agreed that TikTok provides a huge opportunity for loan officers to get their names out there and share their expertise. They talked about how even though loan officers might not like the idea of TikTok or the app itself, they have the potential to reach hundreds of thousands of potential customers, and they should at least try to utilize the platform for lead generation.

Being the subject matter expert is key, but compliance does need to sign off on posts before they go live. One attendee shared that their organization has sent out TikTok training with guidelines on what they can share on the platform with examples.

Equal Housing Logo on Social Profiles

Another attendee asked the rest of the participants how they are displaying the Equal Housing Opportunity logo on their social media profiles where it’s not always feasible to do so. 

A few attendees said that verbiage should suffice when the logo is unable to be displayed directly.

Another option that was shared was to create a story on the social media profile with the logo (specifically Instagram) and then pin that story as a highlight on the profile. 

Loan Officer - Instagram EHO

This seemed to be the “a-ha!” moment for a lot of attendees. That idea got a lot of positive responses and a lot of folks said “I’m definitely going to try that!” 

This is why I love doing these roundtables. Even though this piece of advice might not seem groundbreaking, it’s an excellent example of how ideas and best practices can be shared with one another. It also shows that you’re not alone with your concerns or challenges—if you’re running into them, it’s likely that others are too, and some may even have a resolution for you! 

Join Our Next Roundtable

Here at PerformLine, we’re always looking for ways to connect with other compliance professionals to discuss the latest trends happening in your industry. During our roundtables, there is no one expert in the room—you are ALL experts! When you join us, we hope that you will turn your camera on, bring your voice, and be open to sharing your thoughts and best practices. This leads to an engaging conversation with others that simply want to connect with like-minded professionals.

Check out our upcoming industry roundtables here.

Tags: Mortgage, Social Media