In the mortgage industry compliance policies and procedures are required, but many companies initially created the documents and then set them on a shelf to collect dust. Outdated policies and procedures are not only inefficient — they are risky. Regulatory agencies, mortgage investors, and state examiners all expect mortgage companies to operate with current and applicable guidelines that are effective in today’s compliance environment and market conditions.

Let’s take a look at why it really matters.

Regulatory Compliance

Laws and regulations such as TILA, TRID, and RESPA, have evolved over time, and implementation by regulatory agencies have been enhanced. Keeping your policies updated helps ensure that your company remains compliant, reducing the risk of audit findings.

Operational Efficiency

Clearly identified company procedures provide staff members with a road map of how the company operates, which can help reduce errors, and streamline workflow. When your team members know what’s expected and how to perform tasks consistently, this can reduce the opportunity activities that can become a compliance nightmare.

Risk Mitigation

Policies and procedures that are not updated can lead to incorrect disclosures, or missed deadlines — all of which increase the overall risk. Policies and procedures that are updated by management based on the current regulatory environment can help safeguard the company.

Investor and Audit Readiness

Secondary market investors and state or federal regulatory examiners expect documentation that aligns with current regulatory environment and uses the best practices identified by the industry. With current and updated policies indicates that your company respects the need to have effective and compliant operations to be successful in the mortgage industry.

Support for Growth

In the mortgage industry, it is always changing and if your policies and procedures are not keeping up with those changes, you may have difficulty expanding as new opportunities present themselves. New mortgage products, new lending areas, new technology all needs to be incorporated into your lending practices and ultimately your policies and procedures.

Final Thoughts

Reviewing and updating company policies and procedures is a regulatory requirement. It is also a best business practice that helps you as a mortgage company demonstrate that regulatory compliance is important and it helps your team members know exactly what is expected as they navigate the nuances of the mortgage industry.