Paying unlicensed mortgage loan originators or their proxies
- Assistants who are acting as licensed MLOs.
- Licensed MLOs you sponsor who have you pay their personal, unlicensed LLC or corp.
- Licensed MLOs you sponsor who have you pay a third party entity in their name.
- Lead Generators who are unlicensed but gather the type of information necessary to originate a loan – beyond mere contact information or public records.
- Both the Broker and the MLO are not licensed because they think that as commercial lenders, they are exempt. The problem is the loans they call commercial, are NOT.
- Ignoring SAFE ACT requirements for proper use of NMLS information.
- Ignoring HUD, VA, and USDA requirements for government disclaimers.
- No formal Advertising Book with a log and copies of all advertising
- The Broker or Lender thinks his business cards and web sites are not advertising so he never audits them for compliance.
- Not supervising your MLOs. You have rogue MLO with their own web sites and social media. You sponsor him, and you are responsible for everything he does. He can cost you your license. You think its not your duty, and it is.
- Making NMLS information too hard for a consumer to locate. For example, burying it in the footer, or using 6 point type.
- CFPB requirement for the use of the word LOAN after the words REVERSE MORTGAGE (UDAAP).
Mortgage Call Reports that are inaccurate.
- The MCA does not match the Broker’s Loan Journal.
- The MCA is late or incomplete.
Lack of Evidence of continuity in your Compliance Efforts
- Failure to update.
- Failure to miss required annual training.
- Loan File Audits revealing substantial number of missing documents – no evidence of a complete file.
Making loans on 1-4 family residences without proper disclosures.
- The loan is masquerading as a commercial loan. The “LLC” scam.
- The package is missing minimal GFE and Closing Statement Requirements.
- The Broker fails to do any type of qualifying.
A SPECIAL NOTE about Advertising and Maintenance of Advertising Records: We continue to see small brokers and lenders making mistakes resulting in large fines, suspensions, or revocation. If this happens to you, it can be outside of a regular audit. The different agencies, both state and federal, have staff assigned to watch what happens in print and electronic media form.
You could run an ad, post a flyer, set up a Facebook page, add your name to Linked In ……….. and if you failed to follow DF or the Safe Act requirements, BOOM.
So the first thing I wanted to say is our staff is trained to review client advertising in all forms before it goes live. Just send it via email and wait for our response.
The second thing is to insure you have a proper Advertising Log Book with samples and a dated log. Do you?
All of this is part of our Compliance Program. It is built into our fee so you are encouraged to take advantage of us.
Any Questions? Call us at (800) 656-4584.
Nelson A. Locke, Esq.
Compliance Services USA