Residential Magazine

Making Things Click

The compliance department serves as a crucial piece of the mortgage puzzle

By Liliana Nigrelli

Mortgage lenders tend to highlight their sales staff as the star performers in their company — and not without good cause. Originators interact with borrowers on a daily basis and largely define a lender’s public image. They ensure each borrower’s needs are met, and when something inevitably falls through the cracks or a misstep occurs, the borrower most likely blames the originator.

Originators alone do not define a lender’s success, however. Although they play an integral role, it is those back-office employees who keep the mortgage process moving for borrowers and manage many of the minute details. Frankly, without their support, loan officers and brokers would not be able to fulfill their guarantees and promises. Those very same assurances, however, are what create both the repeat and referral business that drives long-term success.

In particular, the best-prepared originators have the support of a strategically equipped compliance department made up of individuals trained to spot issues — often before they even arise — and who proactively engage loan officers, brokers and other staff members on the latest compliance trends. Together, the origination and compliance departments create an environment where borrower success is not only the primary goal, but inevitable as well.

Protecting clients and lenders

It is fair to ask: How does compliance help sales? Compliance serves as the barrier between success and failure for mortgage lenders. It is their job to ensure that every employee, whether an originator, marketing or underwriting professional, are following all of the relevant rules and regulations throughout the entire loan-origination process.

This is no easy feat and should not be understated. There is a litany of federal laws mortgage lenders must abide by, not to mention individualized state regulations. Although compliance departments continue to battle the stigma of being humorless, stodgy individuals, the truth of the matter is that they are the green light behind every compliant interaction with clients.

Originators may be the gateway to a mortgage, but it is the compliance department that ensures borrowers and lenders are protected in the long run. For a lender, there is nothing worse than going forward with a mortgage only to discover a compliance error.

This not only erodes the hard-earned trust their originators built with the borrower, but it also harms the company’s future credibility. To guarantee no errors occur, lenders must embrace compliance as an integral aspect of all their operations, from sales to marketing and every department in between.

Building relationships

Mortgage lenders guide borrowers through some of the toughest decisions of their entire lives and, from a compliance standpoint, two of their key functions in that process are to be an advocate for the client and to empower the originator to build trust with the borrower. This requires a culture of collaboration that ensures compliance is involved in every step of the lending process, as well as with companywide initiatives.

Whether rolling out a new loan-origination system or sales process, compliance must be viewed as a stakeholder in every step to ensure proper guidelines and regulations are followed throughout the process. They should not be viewed as the “scary” compliance department or sheriff looking to hinder sales, but as partners and coworkers who share a vested interest in their company’s success.

Culturally, this can be accomplished by encouraging compliance staff to engage with fellow employees on a personal level. Many lenders might be surprised at how much their compliance department can learn by simply joining fellow sales, underwriting or information-technology staff for lunch each month.

Likewise, for loan officers and brokers in particular, compliance serves as an additional tool in their belt to build trust with the borrower. An efficient and engaged compliance department should strive to not only provide borrowers with the proper notices, disclosures and documentation, but also ensure originators are equipped to have educated discussions with borrowers so they feel they are protected.

Connecting with partners

Just as borrowers want to feel protected and secure throughout the lending process, so too do a lender’s industry partners. Real estate agents, in particular, are in the unique position of facilitating a deal that requires the participation and trust of multiple parties.

Compliance can serve as a helpful resource to ensure these agents are up to date with any changes in rules and regulations. Whether it is including them in monthly newsletters or notices, compliance can engage with industry partners to give them additional peace of mind when working with a lender.

Of course, some loans and decisions are more difficult than others. If there is ever an issue, compliance must always be available to fellow staff. Whether it is a discussion of how to restructure a deal or about implementing new technology, compliance staff can help their coworkers protect the company from any potential liability.

Compliance can talk personally with borrowers to walk through their concerns, try to get more information and, ultimately, find a way to close the deal. This way, the client’s financial needs are met while also meeting the lender’s end goal of closing a sale.

This level of collaboration also helps compliance spot trends early and often. If they hear many similar questions or comments from fellow employees, they can distribute bulletins that outline pending regulatory or operational changes. If compliance has built these positive internal relationships, they can encourage staff to engage with these notices and ask questions.

Demonstrating commitment

Today’s mortgage market is ripe with opportunities for forward-thinking lenders looking to build trust and meaningful long-term relationships with borrowers. Having a competitive interest rate alone will not be enough to compete, but instead, lenders will need to recognize their role as teachers and mentors to ensure borrowers are making healthy financial decisions.

Compliance’s job is to help both the lender and borrower feel protected throughout the mortgage process. And with an engaged, collaborative compliance department, lenders can set themselves apart from the rest and compete in any market.


  • Liliana Nigrelli

    Liliana Nigrelli is chief compliance officer for Churchill Mortgage. Churchill is a privately owned company by its more than 400 employees. A full-service and financially sound leader in the mortgage industry, the company provides conventional, FHA, VA and USDA residential mortgages across 46 states.

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