Mortgage Compliance: Is Your CRM Putting Your Business At Risk?

The mortgage regulatory landscape can feel like a minefield. Is your CRM system a safeguard or a liability?

Compliance in the mortgage industry is notoriously tough. The price of non-compliance often amounts to millions of dollars in penalties. With legal risks (not to mention fees) on the rise, it is no wonder the cost of loan servicing has increased at least four times since 2008.

However, what does any of this have to do with your mortgage CRM?

A CRM or a solar software like Shape CRM built with compliance in mind can potentially save you multiple thousands of dollars in fines and missed business opportunities.

On the other hand, a poorly optimized CRM—one that sounds great on the surface but does little to protect your business—will only add to the chaos.

How your CRM can help protect your business from devastating legal fees:

Data Privacy and Cyber security

Security and data privacy issues have always been one of the largest concerns of mortgage brokers and loan operators, and even more so in the last several years.

With the growing number of cyber security crimes, tightening data protection laws, and millions of dollars in violation fines, it’s clear that mortgage companies need to try harder to keep customer data secure and accurate.

How the Right Mortgage CRM Protects Borrower Data

As a mortgage broker or loan officer, you inevitably store many client data in your CRM. With that much personal data in your systems, you owe it to yourself (not to mention your customers) to make sure it is safe.

Telemarketing Laws

Loan operators and mortgage brokers utilize several channels to connect with their prospects and customers. Those include phone calls, emails, SMS and voice messages, to name a few.

Misleading Advertisement and Marketing

If you are like most brokers, you are probably pouring thousands of dollars into your ad campaigns. With your ROI at stake, you know how important it is to keep your marketing messages accurate and honest.

Three strict laws regulate mortgage marketing and advertising:

• Truth In Lending Act (TILA): Requires apparent depiction of actual loan terms

• Equal Credit Opportunity Act (ECOA): Prohibits mortgage customer discrimination

• Mortgage Acts and Practices Rule (MAP): Prohibits any misleading about mortgage loan terms such as rates, fees, tax requirements, credit insurance, etc.

Violation of these acts alone could lead to hundreds of thousands of dollars in fines.

Compliance across All Stages of Loan Process

Every stage of the loan process: origination, underwriting, closing, and post-closing, is subject to a detailed set of regulations.

At the loan origination stage, you need to ensure that your customer provided all the necessary documents before moving to the underwriting stage.

Filing inaccurate loan applicant data might feel like a minor thing in the moment but if you are not careful, it could easily turn into a million-dollar settlement. At the same time, following the Home Mortgage Disclosure Act (HMDA), you also need to ensure that your mortgage transactional data is properly stored and unaltered.

A good CRM can regularly track changes to mortgage regulatory laws and provider guidelines to make sure the system as secure as possible. Because if your CRM makes you feel uncertain about your business, all the features in the world will not be enough to help you move forward with confidence.

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