Brokers might find Compliance confusing, as this complicated process includes strict rules varying from state to state. To unravel this knot, we invited Haily Kolberg, AD Mortgage’s Corporate Counsel Leader.
Together with Serena Diaco, the Sales Trainer, Haily explains how Compliance helps brokers follow the requirements, mentions key marketing rules that not everyone knows about, and highlights common mistakes and ways to avoid them.
What Does Compliance Do?
For some brokers, Compliance might seem like restrictions and red tape. However, this process is an additional protection that ensures the loan file is clean.
“Compliance is here to keep the brokers safe. If a loan goes bad, there can be a lot of negative repercussions for the brokers, including triggered audits, fines, or repurchase requests. Compliance helps brokers avoid all of that.”
The Compliance department at AD Mortgage monitors every document – from disclosures to marketing content – to double-check that they follow the rules.
“We are the last line of defense to make sure that everything is right. Obviously, everyone knows the rules – it is our business. But there are always things that come up weird, and we interpret them for you instead of you just knowing them.”
Common Mistakes Compliance Helps to Solve
Each step of the loan process that relies on human actions is prone to mistakes. A lot of the issues are connected with the timing:
“Compliance tries to help resolve them in a way that is clear and fair to everyone and still complies with the laws. That is why we can be seen as holding up files but really what we are doing is making sure the loan closes the way it is supposed to.”
Hailey warns that otherwise problems might arise on the back end that could end up eating up your profit.
Documenting Everything is Key
While brokers might get overwhelmed with regulations and the law, documenting everything is a sound approach. It not only adds structure and transparency but also protects brokers in case of disputes.
“Assume that anything sent out there can be questioned on the back end. So, put it in an email and make sure that it makes sense. Don’t just send ‘Approve.’ – send ‘I’m approving this change to how many bank statements you need to upload.’ It will help you with Compliance and liability.”
Broker Tools for Fast and Clear Deals
AD Mortgage is here to make brokers’ workflow more efficient. Among the services we offer, Haily highlights several tools from the Compliance standpoint:
- A built-in feature in the system allows brokers to send notes and questions back and forth – this is useful for documenting everything and receiving answers quickly.
- With all loan conditions laid out clearly, brokers can make checklists for things they need from borrowers.
“I know there is a big emphasis on efficiency and keeping things moving, but keeping things moving correctly is actually faster.”
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Broker Marketing Rules
Compliance is responsible not only for ensuring that loan files are clean – it also requires marketing materials to comply with the laws. Haily mentions three basic rules that brokers often forget about:
- Ensure that your flyers have full contact information, including your name, phone number, address, and NMLS.
- Market with clear terms. Do not use deceptive language in marketing materials – for example, it is prohibited to use trigger terms or promise something that is not available to everyone.
- When translating advertising into another language, make sure to translate all marketing materials into both languages. Otherwise, it might look like you are targeting a specific product for one location.
“Talk to your borrowers about what is best for them. No matter how the loan goes, if they feel the broker was really advocating for them and took good care of them, got them into a good product, they understand it, they are going to come back.”
Watch the full video on our YouTube channel to gain more insights on Compliance from Haily.
