Latest / COMPLY: The Marketing Compliance Podcast / The State of Mortgage Compliance, August 2023

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The State of Mortgage Compliance, August 2023 · COMPLY: The Marketing Compliance Podcast

• 0:07
  Speaker 1: Hey there , podcast listeners, and welcome to this week's episode. This week I sat down with our senior director of client success here at Perform line Rhonda McGill to discuss the state of mortgage marketing compliance. This month we hosted our quarterly round table with compliance leaders in this space . And today, Rhonda and I sit down to discuss some key takeaways from out event , including the ongoing complications with manual compliance, review of loan officers, the increased risk of loan officers seeking additional revenue from affiliate partnerships, and what compliance names can do to mitigate this risk compliance concerns with loan officers, adopting group names for branding, and how to address the regulatory scrutiny around these, the ever popular topic of monitoring loan officers across social media platforms, specifically the new platform threads, and finally, remote work policy requirements being issued by states and how compliance teams can proactively address these . As always, thanks for listening and enjoy. Hi Rhonda, welcome to the Comply podcast.
• 1:13
  Speaker 2: Hi ac, always good to be here with you.
• 1:17
  Speaker 1: As you guys know, Rhonda is our in-house mortgage industry expert, and for those who have been longtime listeners of the podcast, you'll know that she hosts , uh, one of our staple events every quarter, our mortgage industry roundtables, where industry leaders , um, come together, they discuss what's happening in the mortgage industry and specifically what's happening with compliance , um, as it pertains to their, their companies and their department. So it's a great opportunity for folks to come together, chat with their peers, and, and Rhonda has been leading that for, for quite some time now. So today, Rhonda's joining us. We're gonna do a quick recap of our August round table conversation, what folks talked about, and then Rhonda's takes on , uh, what folks can, can learn from that conversation. So thanks for being here, Rhonda.
• 2:05
  Speaker 2: Yeah, thank you so much for having me. And yes, it was a great conversation and I was just thinking we're going into the third year of the Mortgage Roundtable. Wow.
• 2:13
  Speaker 1: We are , we are . Rhonda and I started the Mortgage Roundtable back in
• 2:17
  Speaker 2: 20 20 21, 20 21, .
• 2:23
  Speaker 1: It's been awesome to see it grow. I'm , I'm super , uh, happy with the folks that are on there, so if you're a part of the roundtable, thank you. And if you're not, come join. It's a great conversation.
• 2:35
  Speaker 2: Always, always, always. I love it.
• 2:38
  Speaker 1: Awesome. Well, let's get started. Every time we start a roundtable or Rhonda starts a roundtable, Rhonda, you start out by asking participants like, what is the top compliance challenge they're facing today? And this quarter, the majority of them said compliance monitoring. So can you just elaborate on the manual aspects of compliance monitoring, especially that , um, of loan officers in the mortgage industry that was discussed as a result of your question?
• 3:02
  Speaker 2: Yeah, and I , and you know, it was, it was, it's , it's so funny that after all these years, you know, I've been, I was in the compliance space for almost a full decade. Um, but that's been like one of the biggest challenges is just that, that monitoring process. So , um, when you're doing , um, the marketing compliance piece, there's a lot of little things that may be , um, state mandated or federally mandated. There's disclosures and disclaimers and all of those things that are required is a part of that process. And so you've got , um, a group of compliance professionals and they're the pros and they review all of the content, make sure that it's done right, and , um, give the thumbs up or the thumbs down and make you do the corrections. And once they get it together, then it's onto , you know, consumer facing . Um, one of the things that I have, you know, noticed that the , a lot of folks , um, in this current environment where interest rates are up, the inventory is low, there's a lot of folks that are , um, they're desperate and that desperation can roll into, you know, sometimes the going rogue aspects of the marketing compliance space. Um, and so folks are not necessarily on top of , um, things because also compliance teams are smaller. Yeah . Um, you know, so everyone is working lean, but the amount of content that's coming at them, it is coming at a, you know, fast clips. So , um, definitely folks were , um, very concerned about the monitoring process, the , um, volume that is coming their way and just, you know, trying to make sure that they can get their content approved. So that definitely, you know, and we'll talk about it in a little bit, but there's a definite need to hit a reset button on collaboration between the marketing , um, teams and the compliance folks so that we can make sure that they're doing things right.
• 5:00
  Speaker 1: Absolutely. And I think rising interest rates has been the kind of cornerstone of conversation I would say of this group for the past several quarters now . Yeah . Highly impacted by it. And even though we focus on compliance, it's the domino effect, right? Of , of, like you said, the loan officers are getting a little bit more, they need to bring in
• 5:20
  Speaker 2: trying find , they're trying to find their customer.
• 5:23
  Speaker 1: Exactly. So a domino effect on the compliance department. So that's a perfect segue to my next question. So obviously these rising interest rates, they're the top concern for this industry, and because of that, some loan officers are seeking additional income through affiliations with other businesses such as insurance companies, title companies , um, et cetera . So can you just give more contacts as to the motivation behind these partnerships and then the risk they bring to these mortgage companies?
• 5:48
  Speaker 2: Yeah, and this was , this was kind of a new one for our round table discussion. And you know, right now, because a lot of the loan officers, they're not making money originating loans mm-hmm. , so they're trying to find other avenues to generate some income. Um, I think the , the majority of folks were saying, you know, collaborating with insurance agencies and realtors and all of those different things, but there's this, there's this other aspect of, you know, it's happening and there's not necessarily the LO reporting to the company that they're doing. They're, they're out there doing this additional, you know, source of income. So it's something that I think the executive level of management has to become a little bit more aware of. Um, compliance folks are stumbling across certain things when they're out here monitoring , um, on the web or on social, and they're finding these things out. And this is risky to the, to the business , um, because there's a lot of implications. You know, there's, you know, a lot of folks are worried about what, what's, you know, what, what respite violations could be had if, you know, depending on what's being said or, you know, are they advertising together? So all of these are things that are kind of front of mind for the compliance folks. And so this is where, you know, we talk again about risks . So if you've got a LO that's out there doing their thing and you've got compliance folks that are focusing on the brand, you know, it, it could become a , a nightmare. And when a regulator comes in and tells you, Hey, did you know your loan officer is out here generating leads from, you know, another source? So all of those are things that I think a lot of , um, of our compliance folks are concerned about. They're trying to keep their eyes on and rightfully so, but it's probably a good time for them to also use this as an opportunity to definitely let executive management know that this is a , this is something that's happening. And to also do a little bit of , um, configurations of their and , um, their conflict policies. You know , what are, what are the conflicts of interest there? Um, and just try to avoid those, the joint advertising pieces when they're getting engaged with that. And just recently , um, C F P B has taken action against the lender for providing incentives in exchange for referrals. So this is a time where yes, folks are trying to find other ways to generate income, but at the same time, it's also a time to be, you know, really on top of the, you know, what's happening and what, what are folks doing.
• 8:19
  Speaker 1: Yeah . It's, it's interesting, like you said, we've never heard about this avenue of revenue for loan officers, so it does make sense . It would open up a whole other, for lack of a better word, can of worms for the compliance team to make sure that everything's compliant, you know, the risk is managed. So it's , uh, it's interesting. It's, it's just different and, and new, but , um, definitely something they could keep their eye on.
• 8:41
  Speaker 2: And it's probably a practice's, you know, folks are probably doing this and have been doing it , but it just seems like it's becoming more of a trend mm-hmm . that mortgage compliance folks are, you know, running across on a more frequent basis. And I think it's causing them a little bit of , um, a pause because it's like, whoa , we weren't expecting this, so how do we, how do we address this from a compliance, you know, standpoint.
• 9:04
  Speaker 1: Awesome. So next up , the group talked about compliance concerns with team names. So brena , what are team names? I'm putting those in quotes, team names in the mortgage industry and, and why are they causing compliance concerns?
• 9:21
  Speaker 2: So it's a way of , um, in this particular instance, and people probably have seen, like realtors do it, they have like their mortgage team of mortgage , uh, I mean, I'm sorry, their team of realtors. And so in this instance, these are mortgage loan originators who are kind of collaborating, working together , um, to generate business, and they create a team name. Um, one of the struggles that occurs is that team name is basically in the eyes of some states is seen almost like they are setting up their own little business per se. And in doing so, it , it's important that, because if you don't do it, you know, like with a D B A , you know, doing business as team Rhonda McGill , um, a part of, you know, midnight Mortgage or whatever my company is, along with their branding and all of those things, so people know that I'm not an independent , um, person out there mm-hmm . , it could cause some regulatory concerns. Um, so you've got more so at the state level, states are really looking at this because they're the ones who are driving around in their neighborhoods and they probably are seeing these advertisements and things, and they're going, okay, well, when we do our next examination, we're gonna ask them about this, you know, what we, what we saw mm-hmm. . So it's just , um, making sure that, you know, from a compliance standpoint that you understand what the state's requirements are , um, if there's a need to do A D B A get getting that D B A done or if you're just not allowing it , um, just making sure that that information is , um, documented and that folks are aware that you just don't allow , um, the team names.
• 11:10
  Speaker 1: Makes sense. And again, team names is something I hadn't heard of before, Mortgage on people . So I think it's interesting too that with the partnership affiliations, how folks are being just more creative given the environment that they're in right now,
• 11:24
  Speaker 2: Lots of creativity out there,
• 11:26
  Speaker 1: more creativity, more compliance, to , to look out for, really
• 11:31
  Speaker 2: Revealed lots of creativity. And , um, yes. Um , folks are definitely , um, they're doing whatever they can to survive the, you know, the market and you know, that that is going to curtail some some of the rules, but , um, definitely folks are trying to be a little bit more creative. And , um, with that creativity also comes a little bit more risk. Yeah . And so companies really need to determine how much risk they're willing to take.
• 12:02
  Speaker 1: Makes sense. All right . Last subject, which is not a subject that is unfamiliar to this group is social media. , social media monitoring of loan officers comes up almost every single time we , we meet with this group, but this time , um, a new social media platform was discussed , uh, threads, which is a competitor to X. So can you just tell us what strategies were shared for managing loan officers presence on kinda all emerging platforms, specifically platforms like Threads .
• 12:39
  Speaker 2: So a lot of the compliance professionals are trying to figure out threads still. Mm-hmm . And um, and I think a lot of folks are still just trying to figure out social media altogether, but because it's always evolving, changing more things you can do a few things you can't do , um, name changes going from Twitter to X, you know, all of those are things that , um, folks are just trying to make sure that they're staying on top of , um, as we're kind of moving forward. And social media's always gonna be a thing. It's not going away. Um, but it's so funny, it seems like every time we meet, there's some new social media. I think it was like TikTok was the big discussion, right ? Um , for several of our round tables, and now we're talking about Threads . So , um, but yeah, it's, it's new. Um, and I think new also brings a little bit of fear, but one of the things that , um, as we were discussing, there are some folks that do have , um, some companies that do have restrictions on the number of social media platforms and which platforms folks are able to use if they are , um, you know, putting their brand out there. And it, it really helps for the , um, compliance teams to really be able to monitor , um, as you heard, there's some that are still trying to figure out how to monitor , um, because they don't have a monitoring, you know, process in place other than manually going in and looking at , um, someone's, you know, Facebook or their Twitter or X or their , um, you know, Instagram or whatever. So with that, you know, budgets are being , you know, have been smaller for some companies, some budgets have had to had to be cut. And so just , um, just knowing that folks are getting to a point where they're going backwards in time in terms of their ability to monitor for compliance is something that's really scary and there's a lot more exposure with that. So , um, you know, I think they're trying to, to control it by saying, Hey, we don't want you to use, but these particular , um, platforms so that we can monitor them for , um, compliance. But one of the things that is important, and we, you know, talk a great deal about it, is the importance of providing that clear guidance. Mm-hmm . and regular training and just making sure that your los know all of the things that they need to do. Almost literally giving them that, that guideline in the checklist format of making sure that they are, you know, checking those boxes whenever they are doing any advertising on in a social media space.
• 15:23
  Speaker 1: Yeah, absolutely. Guidelines and templates. And Ronda just said checklists. So for those of you who have not seen it yet, perform Line has put together a social media checklist for loan officers on kind of what to look out for, and , um, some good instruction . I'll drop that in today's show notes for anybody who , uh, would find it valuable as well.
• 15:42
  Speaker 2: Absolutely . It's it , and it's just those little things that, you know, can just go a long way in making sure that your , um, loan originators are compliant.
• 15:53
  Speaker 1: Wow . Exactly. All right , one last thing to chat about , um, remote work. So one attendee on a specifically mentioned the updated Oregon remote work policy. So can you just give listeners a quick rundown of the key aspects of this policy and how mortgage professionals are grappling with their its implications?
• 16:12
  Speaker 2: So I I , taking it back a little bit further , um, during the pandemic when life kind of shut down , um, a lot of loan originators had to work remotely. You know, they had to work from home. And , um, so once things began to open up and folks started returning back to their offices, there was still this grappling with the states on, you know, who's going to continue to allow this remote working atmosphere. And now people want that. You know, this is something that people have gotten used to. Um, but there also has to be some guardrails around it because you have the implications of privacy. Um, you know, how, how you do all of these different things remotely and not be in an office. You know, what can you , um, do fi have , can you have files? You know, what do you do with that paper? You know, how do you dispose of it? Do you have a shredder? So it's all of those things. And so , um, last year, I believe it was in 2022, Oregon finally , um, went online allowing the remote work, but they also had some , um, guidelines around it in terms of the compliance pieces, which included , um, being able to , um, do kind of the assessment of what does the LO have, you know, in their home to ensure that there's that privacy and all of those things that are important mm-hmm . . And the bigger question was, if someone doesn't live in your state, you know, how do you go out and do the inspection to document that? So we'd have some folks that were ready to fly and they were like, we, hopefully we, hopefully we got some folks in Hawaii, we'd love to go check them out . And I'm like , I'll sign up for that . Um , but we also had , um, a lot of folks that were, you know, figure trying to figure out if the state would let them be , um, compliant by just maybe providing video. Yeah . And you know, almost like when we were in that weird phase of having, you know, N M L S was , um, allowing folks to do their , um, N M L SS testing. And so you have a proctor who shows up online and you have to take your monitor and you have to show the room. And so all of those are things that I think a lot of folks during that particular , um, round table , during the round table , they were just kind of grappling with how do we ensure the compliance without having to necessarily show up and knock on someone's door and search their office space. So
• 18:52
  Speaker 1: It's so fascinating, isn't it, like it's thinking about when we all started working remotely and now the implications years later of, of what it means for these industries that are incredibly regulated, required , and ,
• 19:04
  Speaker 2: And they are . And you know, but one of the things that I, I, I was thinking about it kind of after the fact, and it's making sure that there's also that layer of the lo not having people come to his or her home. Yeah. Also making sure that they're not marketing themselves as the remote, you know, lo and providing their, you know, address or anything, you know, on flyers or whatever. So there's also another aspect that from a compliance standpoint, there are some additional , um, things to think about to make sure that , um, you're in control of the marketing pieces, you know, that you , they're not putting their home address on , um, anything and that, or their PO box, their personal PO box or whatever it may be. But there's a whole nother layer of thought that I, you know, just kind of came into my mind and it was like, Hmm , I hope that folks are thinking through those things and that people aren't out there, you know, send it to my PO box, my personal po Yeah . You know, that could be Absolutely . That could be problematic.
• 20:17
  Speaker 1: Wild. So just wrap that up. In general, any quick tips for how these companies can proactively address remote work policy requirements and potential future implications of, of what's to come?
• 20:29
  Speaker 2: ? You know, what I , um, I think that the best thing that compliance folks can do is just develop strong guidelines and guidance for their los , they have to also understand what , what every single state that's allowing remote work , um, what their requirements are. And then they also have to think a little bit deeper in terms, especially from a marketing compliance standpoint of, you know, how do they put up those additional guardrails , um, to ensure that the marketing is under control. And that LO isn't necessarily out there going to their, you know, local, you know, baseball field and putting up a big , right ? Or whatever it is. But it's, it's those additional scary controls that, you know, I always say, what keeps you up at night? And a lot of times for a , um, compliance person, it's just that fear of the unknown. Mm-hmm. . And so, you know, I think that it's my biggest tip for folks is again, hitting the reset button. Compliance folks, marketing folks work together. Um, we're in a new age of , um, you know, the way the business is being done. Um, compliance teams are a little bit smaller than they used to be. Um, so there's a lot more work , um, for, on their plates. So it's just working together. And I think there's a way, there are ways that they can do these things. They can get some pre-approved , uh, content that can be easily disseminated without having to be ran through compliance. There's a lot of things that can be done , uh, but put , you can put together some good best practices and really work in collaboration together. And I think we recently did a , uh, blog on tips for effective collaboration between marketing and compliance teams. There's some really good nuggets in there. So I would definitely urge, and you might wanna drop that one too, and they are for folks to see, but in the end, I always tell people, you know, let's, let's face it, unlawful conduct is costly mm-hmm . . So you wanna make sure that you see your compliance team as the first line of defense. But I think the marketing team can be just as , um, richly involved in that , um, defense for the company and the brand, because this is definitely not a day and age where anybody wants their brand to be tarnished. And you wanna know that you're trusted by those that are doing business with you, and you also wanna be able to, to not be sitting on, you know, the CFPs website because somebody is taking action against you. Yeah . So it's, there's so many things that I really feel, you know, we have to just work together , um, when you can make sure that you have , uh, technology to monitor, you know, that's where com perform line comes into play. We have the ability to discover and monitor so that you can act. So there are so many things that can be done. Um, it can be done affordably because I think it would be more affordable to pay for compliance technology than it would be to pay for fines. Mm-hmm . So there are definitely things that we can do , um, and we're here for you . Uh, we are your ally , so we can figure it all out together. But I think there's just a great opportunity for folks to, again, hit the reset button and pull in whatever you need, whatever armor you need to , um, defend your brand.
• 24:21
  Speaker 1: Well, that was a perfect ending. So , I don't wanna , I don't wanna go any further. I think Rhonda wrapped it up perfectly. Um, fantastic. I will drop all those , uh, helpful resources, like especially the marketing and compliance team , uh, collaborations log in today's show notes along with that social media checklist. Thank you so much, Rhonda. Any, any last remarks?
• 24:47
  Speaker 2: I, you know what, I have nothing. I am looking forward to our next round table, which is in , uh, November. I'm just excited about the , um, new faces that we continue to see as well as the old faces. And it's just been , um, so rewarding to really build this compliance community , um, because it feels like there's really, they're really taking off. So lots of friends were made at the last one and , um, like we're doing that virtually imagine what we could do in person. So . Very cool. Just really exciting times for us all.
• 25:22
  Speaker 1: Very cool. Very cool. Well, I'll drop the registration link for the next round table in today's show notes as well for you guys. And thank you Ronna , thank you for leading these round tables. Thank you for chatting with me after that . We always appreciate it. Thanks for listening to this episode of the Comply podcast. As you heard, there were several resources mentioned during today's episode that I will drop for you in today's show notes, including our social media compliance checklist for loan officer training and oversight, a blog on tips for effective collaboration between marketing and compliance themes , and our registration for our next Comply mortgage round table happening in November. As always, for latest content on all things marketing compliance, you can head to content dot perform line.com . And for the most up-to-date pieces of industry news events and content, be sure to follow Perform line on LinkedIn. Thanks again for listening, and we'll see you next time.