The Dreaded Regulatory Audit

Posted on Posted in Common mistakes, Mortgage Broker Compliance, New Guidelines

You remember the day well. A beautiful morning, the market is growing, business is going very well and you are just on top of the world as you pull up to your office. It all ends in the next 30 minutes as you find out you are being audited by your regulator. A thousand things go through your mind regarding quality controls, policies, procedures, loan files, compensation plans, advertising and all those items you have may have been putting off on your business need to do list and concentrating on originations instead. As you look at the regulators initial questioner, looking more like a telephone book by the minute, you just know this is going to be worse than death by a thousand paper cuts and hope you will pass. As we all know “hope is not a business plan”.

In order to protect themselves Mortgage Brokers need to work with an expert from the minute they get the audit notice, not wait until they have full fledge forest fire on their hands. An individual who knows the rules, regulations and laws can work with you to properly get ready for the audit, plug the leaks upfront, right the ship and turn the audit into a relatively painless process.

Unfortunately most Mortgage Brokers do the best that they can and if they do any volume at all almost always end up with a multitude of possible violations, questions to answer, documents to provide (if they can be found) and explanations to be given. At best this drains the time and energy you would have put into the management of your business, the origination of loans and, at the worse, is a precursor for things yet to happen.

The day has long since passed where the audit is just a casual perusal of files. In the current environment of heightened rules and regulations your audit will be right up there with that dreaded letter from the IRS. If you are not prepared and don’t know what the regulators are looking for the audit can turn into an ongoing event that seems to have a life of its own and never ends. Much like the IRS the mortgage regulators always find something and that something needs to kept to a minor error that doesn’t lead to any further issues.

Don’t wait until the audit is in process and you realize you may have a problem. The money you will save with expert assistance will be significant and a sound business strategy as opposed to large fines,  fees and other more onerous costs. Mortgage Defense, Inc. brings 30 years of experience and countless favorable audits to the table and can provide you the help you need. We know exactly what a regulator is looking at, looking for and can properly prepare you for an audit while you keep your business humming. Give us a call today – 704-574-0364.