We just wrapped up our final mortgage compliance roundtable of the year earlier this month.
As we’re looking ahead to what’s projected to be another challenging year for the industry, participants openly discussed navigating the complex world of mortgage compliance, sharing their experiences and insights.
We discussed various challenges, including internal compliance risks, team structures, shared social media pages between loan officers and realtors, the FTC’s updated endorsement policy, and increased monitoring requirements from regulators.
Here’s a recap of our discussion.
Internal compliance risks: Team structures, increased requests, and decreased resources
We kicked off the discussion with a poll and asked attendees, “As we’re wrapping up the year, what do you see as some of your biggest challenges?”
69% of participants responded that internal risks—restructuring, uncertainty, and lack of resources—are a top challenge for their mortgage organization.
As economic conditions remain unfavorable, many mortgage compliance teams have been reduced, leading to the remaining employees feeling stretched thin with their responsibilities.
One participant asked how others are now structuring their compliance team amidst decreasing resources and headcount, assuming that many aren’t able to have specialized roles on the team.
The consensus is that many mortgage companies are having to shift away from specialized compliance roles to more generalized roles.
This shift has significantly increased the workload and complexity for compliance teams, who now are trying to juggle a broader range of tasks, including an influx of “crazier and riskier” requests as loan officers are trying to drum up business.
On the flip side, a few organizations haven’t experienced downsizing but are still facing increasing compliance risks. The rapid introduction of new products and partnerships in the mortgage industry, such as co-branding with realtors, results in a constant influx of new compliance reviews.
Compliance teams are finding themselves spending a significant amount of time reviewing and handling these requests from other parts of the business, which leaves very little time for other important and strategic compliance tasks, including remediating issues on social media or the web, and reviewing and updating policies and procedures.
Loan officers sharing Facebook pages with realtors
One attendee asked if anybody had experience with loan officers wanting to share Facebook pages with realtors.
Many said that they don’t allow this practice at all due to the compliance and reputational risks. While realtors and loan officers are subject to different compliance standards, blurring these lines through a shared social media page could lead to issues.
For example, if a realtor posts non-compliant or inappropriate content, it then impacts the loan officer and their mortgage company since they’re affiliated with that page. Participants agreed that sharing these social media pages sets the organization up for a lot of risk for regulatory scrutiny and legal fees that can be otherwise avoided.
But, if you are going to consider collaborative efforts, it should be made clear on the social media page that there’s no exchange of benefits or co-marketing agreements.
Another best practice is to ensure that you have administrative rights to these social media pages so that action can be taken quickly in the event of non-compliant posts or content.
The FTC’s updated endorsements policy
Another key topic of this roundtable was the FTC’s updated endorsement policy, knowledge sharing between participants about updates, and how they impact loan officers on social media.
Some key changes that were discussed are:
- Review Gating: One of the notable changes is in the practice of “review gating.” Previously, businesses would selectively ask only those customers who gave positive survey feedback to leave reviews on public platforms. The new policy mandates that if you invite some customers to leave reviews publically, you must extend this invitation to all customers, even those who might have left less favorable feedback.
- Disclosure Requirements: The FTC emphasizes the importance of transparency when exchanging anything of value for reviews. This must be clearly disclosed if a customer is offered any incentive for a review. The FTC provides a comprehensive summary page with guidelines to help businesses navigate these requirements.
Navigating increased loan officer monitoring requirements
One attendee shared their experience with a recent examination with the Office of the Comptroller of Currency (OCC). They explained that regulators asked about end-to-end monitoring of phone call interactions with consumers and that sample monitoring is no longer sufficient. They want to see records of all interactions with specific consumers, which has never been asked before.
Participants shared their experience with handling the monitoring and oversight of loan officers’ phone communications for compliance.
Some are using compliance technology to help monitor phone calls and text messages, which then prompted a discussion about whether outbound calls from loan officers are recorded, and if so, how are the disclosures made to the consumer that their calls are being recorded? Answers were mixed, but the general consensus was that loan officers are instructed to remind customers the call is being recorded.
Participants also talked about policies for loan officers’ cell phones and how interactions from those are tracked. Especially in the mortgage industry, those out-of-business-hours communications are crucial. Best practices include having an app that can track communications on cell phones and providing extensive training and communication guides for loan officers to keep them compliant.
This then sparked another question about how viable monitoring all communications really is—especially for those interactions that take place in person. At what point is having complete oversight not feasible?
Participants agreed that—realistically—being able to monitor, review, and document every single interaction is near impossible. If an organization has enough controls in place—complaint management, customer feedback surveys, proper training, etc.—it should be sufficient to ensure compliance and to catch any potential issues. But, will the regulators agree? That’s still to be determined.
Join the next mortgage industry roundtable
Want to be part of the next roundtable discussion? Request your invite to be a part of the COMPLY Mortgage Compliance Community—a community dedicated to navigating the ever-evolving world of mortgage regulatory compliance.
As a member, you’ll have access to:
- A private and monitored Slack group where you can connect and collaborate with your peers year-round
- Invitations to our quarterly virtual roundtable events
- Priority access to mortgage compliance content and additional events (both in-person and virtual)
Request your invite here!
PerformLine 
John Zanzarella 
Gianna Kennedy