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By Kristin Delaney
Sales-and-marketing coordinator
Document Nation LLC
The Value
of Compliance
Assistance
compliance department or trained
expert, using an audit service can
provide an unbiased, third-party perspective. Additionally, outsourcing
this service allows in-house staff to
redirect efforts toward activities that
promote business growth.
Regardless of how brokers manage
compliance, hiring third-party experts
can provide additional protection by
identifying noncompliant documentation. One area that can leave an office
extremely vulnerable to compliance
issues is TILA, which applies to all
purchases and refinances of primary
residences and second homes. (Note:
Investor mortgages remain exempt
from TILA.)
TILA violations can be costly and
detrimental. If a TILA-disclosure
violation is made, a borrower may
assert a claim for damages in any
competent court within one year of
its occurrence. Consequences could
include actual damages, statutory
damages equal to twice the amount
of the finance charge, costs and attorney fees.
Similar, repetitive errors in multiple
clients’ files can lead to a class-action
suit with consequences based on net
worth, costs and attorney fees. Enforcement by administrative agencies
also looms, and temporary or permanent cease-and-desist orders can be
issued during and after an investigation, along with fines and criminal
penalties.
In the changing regulatory landscape, it can
be wise to hire someone to watch your back
TILA points of note
The TILA amendments that took effect
this past July 30 were designed to clarify information provided to clients and
to save borrowers from “last minute”
changes at closing. There are numerous key items in these amendments of
which brokers should be aware — and
It often seems as though new rules kick in as soon as mortgage bro- kers master the old ones. In light
of this, brokers may want to consider
hiring a third-party partner to help.
Although regulatory compliance is
serious business, brokers often don’t
remain up-to-date on policy modifications. Violations of the Truth in Lending Act ( TILA) and other regulations
can result in severe and expensive
consequences. Some of the most-common errors can result in restitution
penalties, which can be the beginning
of the end for a mortgage business.
Hiring a third-party partner can
help you as a broker avoid costly
consequences and allow you to focus
on closing deals rather than reading
reams of legal notices. The right partner ultimately could save you from
losing your professional license and
personal livelihood.
Why compliance matters
Although many brokers still staff a
Kristin Delaney is sales-and-marketing
coordinator for Document Nation LLC, a
full-service nationwide information- and
document-management company. In addition
to the revolutionary imaging software it uses
to archive post-closed files online via its
secure Web site, documentnation.com, Document Nation offers compliance and client-continuity services. Delaney is responsible
for developing business relationships with
mortgage banks, brokers and lenders in need
of strengthening their post-closing-compli-ance oversight. Reach her at (877) FILE-USA
(345-3872) or KDelaney@DocNation.com.
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