QUESTION  We are a medium-sized servicer with a servicing portfolio in almost all jurisdictions in the United States. I am an attorney who heads the team evaluating Qualified Written Requests (QWR). We recognize there are specific elements to a QWR. However, sometimes, it feels like a judgment call to determine what is or is not a QWR.  I often find myself taking deep dives into RESPA’s Regulation X and case law to interpret whether a letter from a borrower constitutes a QWR or a complaint, each with obviously different – though sometimes overlapping – resolution criteria and statuto ..read more

QUESTION  The banking department claims that our “mortgage loan officer” category is incorrectly defined. As a result, they think we are not licensing MLOs who should be licensed, leading to us originating unlicensed loans. Now, they are auditing our loans for licensing violations.  Our attorney believes that our policy clearly states how we define an MLO. However, she is concerned that we do not provide examples of the activities and services offered by Mortgage Loan Originators.  We are in the process of preparing our defense but need some assistance in coming up with examples ..read more

QUESTION  You have been writing about Artificial Intelligence since it became popular. Most of us in my company only have a superficial understanding of AI. As the Compliance Manager, I surveyed those who were using it. It turns out that it’s only used in chats and searches. Meanwhile, our Board wants to introduce it into our loan origination procedures.  Several companies are now pitching Senior Management and the Board regarding their AI capabilities. Frankly, I see a massive training, monitoring, and auditing future—and they have tasked me with writing a risk/benefit outline for u ..read more

QUESTION  There was a big argument in a sales meeting last week. The loan officers got into a verbal fight over the use of the word “woke.” After the meeting, the whole company was talking about it. HR and Compliance got involved. I’m not sure what will happen next. But there is a lot of hate churning up in the company. This has never happened before. We were all friends, but now everyone is taking sides. All over the word “woke.”  During the sales meeting, they discussed expanding into a mostly minority area. One of the loan officers got up and said he refuses to go into that area a ..read more

QUESTION  Our banking department called us out for publishing testimonials that our loan officers use. We were contacted by an examiner who said they had checked out some of the testimonials and endorsements and found that some were either bogus or misleading.  First of all, I didn’t know a banking department could go so far as to check out the veracity of testimonials.  Secondly, our loan officers are honest and get their business from referrals, but the banking department makes them look like they were intentionally making up bogus testimonials.  Thirdly, the loan officer ..read more

QUESTION  A few months ago, you wrote about the regulatory challenges associated with comparison platforms. It was eye-opening to us. Because of your guidance, we revised our relationship with a comparison platform. Thank you!  But I must write you about a recent problem with the comparison platform. The platform offers placement for our loan products because of financial inducement, making the listing likely to be seen by the consumer. The preferred placement has many more features, such as requiring fewer clicks to access product information or increasing the likelihood that a cons ..read more

QUESTION  I am the General Counsel of a large Western mortgage lender. I am writing on behalf of myself and our Chief Compliance Officer. We have received notice from an executor of a borrower’s estate. The executor wants access to our digital portal. The executor’s purpose is to review the decedent’s account, assets, and liabilities.  A careful reading of estate-related documents and reviewing the power of attorney show that the borrower did not grant the executor specific authority to access a digital portal. We do not want costly litigation. It is our view that we cannot give the ..read more

QUESTION  We are a lender in the northwest. We have a Code of Ethics that was accepted by our banking department. Recently, they did an audit. In the exit interview, they said we should have a hiring and employment policy that screens for character and fitness.  Our Compliance Manager asked who should be screened, and the auditor said we should screen for loan and senior officers, managers, and directors. We do this, but it’s not formal enough for them. They want a set of procedures and criteria.  In researching procedures, we found that some banking departments have broad state ..read more

QUESTION  Our company is under investigation by the banking department and law enforcement for allowing "money mules" to use our financial services. They managed to use our mortgage and depository services. The crooks targeted people in nursing homes and hospice care facilities.  The banking department is now determining if we properly implemented an Identity Theft Protection Program and Anti-Money Laundering Program. They're looking back at the procedures as well as the level of testing and training. Our CEO has told us that she expects an administrative action against us.  We ..read more

QUESTION  I am a compliance analyst in our compliance department. We are getting ready to file our HMDA-LAR. Yesterday, our internal auditor requested an outline of the steps we take to evaluate our HMDA policies and procedures.  Our compliance manager has put together a few bullet points. However, we need some procedures and internal controls that tell the internal auditors adequate measures are in place to ensure compliance.  Mostly, our procedures are informal. We follow the HMDA guide and use HMDA reporting software.  I am reaching out to you for guidance in putting tog ..read more