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Brokers Compliance Group:
Compliance Solution for Brokers
October 15, 2012

Greetings!

 

When we established Lenders Compliance Group years ago, there were no risk management companies devoted exclusively to mortgage compliance for lenders. Yes, there were law firms tackling aspects of regulatory compliance. But they only concentrated on certain areas of compliance.

We felt there was a need to offer a compliance team of experts in all areas of mortgage compliance, plus provide all the support services that a lender needs, such as compliance administration, quality control, loan analytics, platform development, exam readiness, and so much more. Most important, of course, was providing on-going risk management support.

At the time, we were the first and only risk management firm offering such an array of services. Eventually, the copy cats arrived. We were flattered, really. They didn't (and still do not) offer our range of services; nevertheless, we were no longer the "only" one of our kind. But we were certainly the first!

Throughout the years, I felt there was an under-served part of the mortgage originating community: the mortgage broker. Here was surely one of the most important participants of the mortgage industry forced virtually to fend for itself!

Yes, brokers had their associations to rely on for compliance needs. But the associations were hard pressed to stay on top of all their advocacy obligations, while also trying to offer an active, continual, compliance component to their members. For the most part, law firms did not assertively seek a broker's compliance business, because in most cases brokers simply could not afford the fees. Since most brokers are small firms, affordability is - as it is for other market actors - a paramount issue nearly all of the time.

Brokers were constrained to rely on their wholesale lenders to provide compliance guidance, somewhat in the same way that some lenders rely on their investors' compliance guidance. Sometimes, brokers got conflicting guidance from their lenders. And the brokers often did not want to ask other brokers for guidance, concerned that they would be showing weakness in a highly competitive environment.

To make matters worse, brokers had to rely on "manual companies," firms that put out simple, short and sweet policies and procedures, often riddled with errors, yet sold at a low enough price to attract a broker. Some of these manual makers had no deep experience in compliance, no compliance experts on staff, and, to be sure, virtually no experience in defending policies and procedures to regulators and examiners.

Brokers had to settle for less - because they just could not afford more and there was no mortgage risk management firm devoted to their interests!

With the foregoing in mind, we have established Brokers Compliance Group, our risk management division offering cost-effective mortgage compliance exclusively to mortgage brokers.

Clients will now have a compliance team to support their regulatory compliance needs!

At this time, Brokers Compliance Group is the first and only risk management firm willing to take on this mission. In due course, I'm sure the copy cats will arrive on the scene. And that's a good thing for the mortgage industry, because it means that affordable broker compliance support will be recognized as a necessity.

In effect, I want to enhance the culture of compliance itself! I want to make sure that brokers conduct business on a level playing field. My colleagues and I have now made a long-term commitment to supporting the compliance needs of mortgage brokers.

If you know mortgage brokers that would benefit from becoming a member of Brokers Compliance Group, perhaps you would consider forwarding this newsletter to them. And if you are a mortgage broker, please contact us for more details.

Visit the new website or forum to learn more!

Best wishes,
Jonathan Foxx
President & Managing Director 
 

 

Commentary
Jonathan Foxx - Portrait
Jonathan Foxx
President and
Managing Director

Lenders
Compliance
Group


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LENDERS COMPLIANCE GROUP is the first full-service, mortgage risk management firm in the United States specializing exclusively in outsourced mortgage compliance and offering a full suite of services in residential mortgage banking for banks and non-banks. We are pioneers in outsourcing solutions for residential mortgage compliance. We offer our clients real-world, practical solutions to mortgage compliance issues, with an emphasis focused on operational assessment and improvement, benchmarking methodologies, Best Practices, regulatory compliance, and mortgage risk management. 

 

This newsletter is free to subscribers, clients, and colleagues, who also regularly receive our free Mortgage Compliance Updates, Compliance ALERTS, and Commentaries.  

 

Information contained in this email is not intended to be and is not a source of legal advice. The views expressed are those of the contributing author, as well as news services and websites linked hereto, and do not necessarily reflect the views or policies of Lenders Compliance Group, any governmental agency, business entity, organization, or institution. Lenders Compliance Group makes no representations concerning and does not guarantee the source, originality, accuracy, completeness, or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented herein.

 

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