MReport March 2018

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20 | TH E M R EP O RT COVER STORY both the initial and corrected CD. The third is that TRID 2.0 did not expressly authorize sharing of CDs between seller and bor- rower. They simply stated that if the method of sharing complies with the requirements under the Gramm-Leach-Bliley Act (GLBA) and Regulation P, as well as other state and federal laws, then it is in compliance with the rule. Many lenders have elected not to prepare the seller's CD because of potential liability and expect the settlement agent to prepare it. Finally, the CFPB remained silent on extending the period in which compliance with the original TRID rule is satisfied by "good faith" efforts to comply. What this translates to is future examinations could mandate "hard core" compliance with requirements of the original rule. Adapt—Or Fall Off G iven the current state of regulatory uncertainty, imple- menting regulatory compliance is certainly a task. According to Kramer, in this state, it is vital for companies to continue their cur- rent compliance programs since in most cases the changes they imple- mented over the past few years are valuable from a compliance, risk and business perspective. "For many, however, this may be a hard decision, but cutting back now when in three years the regulatory environment may swing back in a different direction could be a costly decision," said Kramer. Maintaining perspective and focus is also at the forefront for mortgage professionals implement - ing the best strategies within their companies. "In the compliance world, we tend to be very reaction- ary, sort of always jumping from one major initiative to another," said Cremata. "One year, it's data pri- vacy. Then, it's TRID. For the last couple years, it's been HMDA." And, of course, to some extent, this can't be helped. Regulators keep passing new regulations, and often mortgage professionals have no choice but to focus virtually all of their efforts on solving for those regulations if they want to be remotely compliant by the time they become effective. "But I think that, in constantly jumping from fire to fire, we have a tendency to sometimes lose per - spective," said Cremata. "And we forget that, when we solved for those earlier initiatives, we didn't always come up with perfect solutions." Although the industry is constantly being forced to shift its primary focus to the "next big thing," it is important to still al- ways be thinking about what can be done to improve all aspects of the compliance workflow. Implementing any new regula- tion requires a significant amount of cost, time, and resources. Lenders may be inclined to think that one system, such as their loan origination system (LOS) or document generation system, is sufficient for regulatory compli- ance auditing in order to trim some of these costs. However, the honest answer is that these providers, as well as lenders, are in the business of originating loans. The best tool for the job of auditing for regulatory compliance is an independent automated regulatory compliance platform. According to Vong, the hardest part for companies imple- menting regulatory compliance may be making that connection. Genevieve Walser-Jolly, Attorney, Severson & Werson, PC, called the cost to properly implement regulatory compliance an investment. As an attorney who has vast experience handling cases for lenders and servicers struggling in this sector, she sug- gests that one of the best things reverse mortgage lenders can do is focus on their advertising. "It is far more cost efficient to evaluate advertisements upfront. Reverse mortgage lenders need to be aware of both state and federal laws. They should also strive to comply with industry best prac- tices. These steps give lenders the best shot at avoiding enforcement actions by regulators. Walser-Jolly said. "It's an investment those companies should be aware of and be willing to make on the front end. Factoring this into their business model versus playing catch-up down the road can save a lender exponentially." Finding Your Footing M ost business people are so focused on their day-to- day operations that they don't have a lot of time to think about regulatory changes coming down the pike. However, Wambeke urges professionals to pay atten - tion as their compliance depart- ment serves as the early warning system. "It's our job to be sure the businesses build compliance into their processes and dedicate suf- ficient resources to evaluating and managing their ongoing compli- ance risks," Wambeke said. "It's important to create a culture that embraces change because change is constant—and it isn't limited to regulatory change. We've got to keep up with the industry and be prepared for disruption." Regulatory compliance is a way of life in the mortgage industry, and ultimately, in order to best serve the consumer and pro - vide more opportunities for the American Dream of homeowner- ship across the nation, it is vital for service providers to continue to help the industry address the uncertain regulatory environment to the best of their abilities and be ready to adjust to serve the indus- try with whatever comes next. "The pace of change may slow down from administration to ad- ministration, but it always comes back," said Macdonald. "Successful organizations are those that look to regulatory compliance as an opportunity, not a burden." Regulatory changes provide an opportunity for mortgage compa- nies to re-examine their mortgage origination processes. Those orga- nizations that approach regulatory compliance with this attitude will find gains in all facets of their business every time they imple- ment a new regulatory change. "Understanding how existing requirements interact with—and sometimes contradict—new rules and getting this operationalized in "Understanding how existing requirements interact with—and sometimes contradict—new rules and getting this operationalized in the lines of business is a significant challenge. To accomplish this, you need the right tone from the leadership of the organization, the right people, and the right processes." —Kevin Brungardt, CEO, RoundPoint Mortgage

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