Did you miss 2016 CE? Click here for Late CE.

The Mortgage-State Mortgage Committee (MMC)takes action against New Day Financial, LLC

The Mortgage-State Mortgage Committee (MMC), representing 43 State Regulators, takes action against a lender for NMLS Test Conduct and CE Prohibited Practices.

New Day Financial LLC was accused of having company staff in the compliance  department take NMLS CE for 20 licensees (including C-Level Executives) and communicating/storing NMLS test information for the purpose of improving test prep tools (and pass rates).

The Results:

The COO was removed, a $5.2M penalty assessed, an independent auditor required to look at training/education and review corporate governance for other possible changes.

This may be the first action we've seen but its no small action combining the efforts of the MMC representing 43 states and resulting in over $5M in penalties.

If you are in the industry, you get weary of articles that are all about hype and judgment. Why don’t we agree not to go there and instead talk openly about learning from what happened.

Should we have known about these rules?

Yes we should have. It’s important to know that all of the rules that apply to mortgage lending are important. They must be followed.  If you see a culture that accepts these types of things or condones it, be a part of the change that’s needed. I am sure the company had people that understood that these types of things weren’t acceptable. They either didn’t feel empowered to act or didn’t want to speak up. Be the solution. Speak up and help others understand the importance. If a C-level officer’s job was affected then everyone in the organization from top to bottom should care and speak up.

What specific lessons are here?

Every rule matters. There isn’t a rule that someone doesn’t care about. Also, remember that when you do business by the rules, you are protected. Others can’t break them and gain any advantage. There may be industries that are “all about sales and not about the details” but this isn’t one of them. If you do NMLS training in-house, you are going to be held to a high standard. Make sure you have your “game plan” fully in place and regularly tested or outsource it. It’s really that simple. Some companies take the approach of keeping it in-house and others say they “focus on what they are best at” and they outsource the rest (including the NMLS training and education). There’s no “right answer” but doing it in-house means being fully prepared for all the responsibilities.

Beyond that, the company responded by implementing some very good practices. There’s no recipe for the rest of us, but here’s what you can “take away”:

  • Developed a “tipline” managed by a third party company for employees communicate issues
  • Developed and implemented a whistle blower policy
  • Had employees that were affected re-take CE
  • Require quarterly certification in writing by managers that they are overseeing staff and their compliance with state and federal regulations
  • Conducting company required ethics training

Did these steps close out the issues in the regulators minds?

They didn’t. In this case, the MMC required the lender to agree to retain a state approved independent auditor.

What can we learn from this?

We should know that:

  • The NMLS and the testing and education are not to be overlooked or taken lightly. These are SAFE Act requirements and must be followed. If they aren’t, the penalties are significant.
  • No one in an organization is immune from following them. Senior management, top producers, new originators.....All licensees must follow the rules and complete the required steps, by themselves, without any assistance.
  • In-house training/education departments doing NMLS training/education cannot short cut the testing or required education. These in-house departments are held to a high standard and these responsibilities are significant. Lenders that don't follow them could be at risk when one disgruntled employee leaves and exposes an issue like this.
  • All of a company’s policies and procedures matter. Making sure that your company policies cover all of the rules including testing and education are key.
  • The NMLS now requires students taking NMLS approved courses to attest to their identity, state they will not seek or accept outside help to complete the course or help others. The Rules of Conduct (ROC) form was designed to remind/reinforce the rules.

The full ROC form is here:

http://mortgage.nationwidelicensingsystem.org/courseprovider/Course%20Provider%20Resources/Rules%20of%20Conduct%20for%20NMLS%20Approved2.pdf

I am sure there will be more for all of us to learn, but let’s agree to look and learn and stay away from the judging and finger pointing. We are all in a great industry and we all have a lot to gain by sharing information related to compliance.

Consent Order:

http://www.csbs.org/news/press-releases/Documents/NewDay%20Consent%20Order%20(with%20Signatures)%2020150410.pdf

CSBS Press Release:

http://www.csbs.org/news/press-releases/pr2015/Pages/pr04132015.aspx

Scott Weghorst is President of Diehl and Associates, a National NMLS, Compliance and FHA/VA/USDA Mortgage Skills Training Firm serving over 50,000. 11478 Lantern Road, Fishers, Indiana 46038 317-272-7600 X105 scott@diehl1.com

scott-weghorst

Brief Bio for Scott Weghorst:

Training in all delivery modalities for mortgage industry topics like TRID, LO Comp, CFPB preparedness, and all aspects of the loan origination process.

Consultant to lenders on training solutions, ranging from standardized options to completely customized and private label applications, along with tracking for licensed and non-licensed content.

Past President and Board Member, Indiana Mortgage Bankers Association

Mortgage banking experience includes growing an Indiana-based lender to Top 25

April 15, 2015 In: Blog Comments (None)
20 Hour Pre-licensing NML Approved Course

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum."

"Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur?"

next

×
2 Hour Live Webinar Test Prep Session

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum."

"Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur?"

×
Test Prep Tool with 500 questions and 5 simulated exam

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum."

"Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur?"

×
Test Prep Tool with 500 questions, 5 exam and 130 key topic video

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum."

"Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur?"

×
Intro to Mortgage Banking Pre-Course

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum."

"Sed ut perspiciatis unde omnis iste natus error sit voluptatem accusantium doloremque laudantium, totam rem aperiam, eaque ipsa quae ab illo inventore veritatis et quasi architecto beatae vitae dicta sunt explicabo. Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione voluptatem sequi nesciunt. Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt ut labore et dolore magnam aliquam quaerat voluptatem. Ut enim ad minima veniam, quis nostrum exercitationem ullam corporis suscipit laboriosam, nisi ut aliquid ex ea commodi consequatur? Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum fugiat quo voluptas nulla pariatur?"

×
Silver

Silver is a great way to get in the game and with this your receive the complete 20 hour course, Essentials of Mortgage Loan Origination Manual and a free 2 hour Live Test Prep Webinar. Plus you save 20%

×
Gold

Gold gets you another great tool, the Test Prep Software tool that allows your to quiz yourself and diagnose where you need to study more. Gold also saves you over 20%.

×
Platinum

Platinum includes all the best tools plus short edited videos on the key course topics. There are over 130 videos that can make your study time quick and enhance the speed of learning by combining visual and auditory learning. This package saves you over 30%

×
Diamond

Diamond gives you all the rest of the tools plus the Intro to Mortgage Banking which can help you learn or refresh the essential concepts of the industry from the market structure, the mortgage process, products and key terms. The bet part is that you save 33% with this option

×