7 Key Steps to Ace Your State Examination Prep

Mortgage brokers often face the challenge of navigating federal and state regulatory requirements, and sometimes, the biggest hurdle is realizing what they don’t know. This lack of awareness can lead to compliance issues and missed opportunities in an already complex landscape. Missing a crucial detail can lead to costly fines and hinder your business’s growth. To ensure you’re prepared for your upcoming state examination (or audit), here’s a checklist of essential steps:

1. Update Your Policies Regularly

Update Your Policies Regularly

  • Federal and State Policies: Ensure your policies are comprehensive and align with both federal and state requirements. Regular updates, at least annually, are crucial to stay compliant with any new legislation.

2. Implement Comprehensive Compliance Training

Establish Marketing Strategies

  • Company-wide Initiatives: Establish training that covers Anti-Money Laundering (AML) and Customer Information Security. Consistent training across your organization helps maintain high compliance standards.

3. Review Your Advertising Protocols

Review Your Advertising Protocols

  • Advertising Review Process: Develop a structured process to review all advertising materials. Retain copies of your advertisements, including social media posts and video transcripts for potential audits.

4. Manage Disclosures and Record Retention

Manage Disclosures and Record Retention

  • Retaining Necessary Disclosures: Know which disclosures need retention and ensure you’re sending all required broker disclosures. Organized records help demonstrate your compliance during an audit.

5. Log and Address Customer Complaints

Log and Address Customer Complaints

  • Complaint Management System: Implement a system to log, track, investigate, and respond to customer complaints. This demonstrates your commitment to customer service and regulatory compliance.

6. Establish a Robust Hiring Process

Establish a Robust Hiring Process

  • Employment Agreements: Craft clear employment and LO compensation agreements. An AML and IT/Cyber Security program is also essential to protect your business from internal and external threats.

7. File Your Mortgage Call Reports Timely

File Your Mortgage Call Reports Timely

  • MCR and Financial Condition Report: Ensure your Mortgage Call Reports are filed on time. Regularly review the status of these reports to avoid penalties for late submissions.

Strategic Compliance Partners has helped clients across all 50 states successfully prepare for examinations. Our expertise ensures you’re not just meeting, but exceeding compliance expectations. Don’t leave your compliance to chance—contact us at 301-578-6015 or email us at sales@strategiccompliancepartners.com to see how we can assist you today!

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About Ari Karen

Ari Karen is an experienced litigator who has focused his practice in representing financial institutions in both government investigations and litigation before state and federal trial and appellate courts nationwide. Mr. Karen’s practice is diverse, representing clients on matters concerning banking regulations, Dodd Frank financial reform laws, contractual disputes, employment and labor statutes, wage-hour class actions, employment discrimination and fair lending matters, whistleblower complaints and non-competition claims, among others.

Mr. Karen speaks regularly on topics affecting all types of lenders including fair lending and disparate impact, LO compensation, marketing service agreements, compliance with social media, non QM lending, vendor management, and much more. Mr. Karen is a principal in the Financial Institutions Regulatory and Labor and Employment practice groups of the Offit Kurman law firm.