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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’s no wonder the cost of loan servicing has increased at least four times since 2008.
But what does any of this have to do with your mortgage CRM?
Simply put: A 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.
So, how do you tell one from the other?
You can start by reading this guide. In this detailed article, we review a selection of the biggest mortgage industry compliance regulations and provide clear, practical examples for how your CRM can help protect your business from devastating legal fees. Read our article on the best mortgage CRMs for more guidance on choosing the right CRM for you.
CRM Compliance Check #1: Data Privacy and Cybersecurity
CRM Compliance Check #2: Telemarketing Laws
CRM Compliance Check #3: Misleading Advertisement and MarketingCRM Compliance Check #4: Compliance Across All Stages of Loan Process
8 Questions to Find Out if Your Mortgage CRM Is Putting Your Business at Risk
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.
According to Wolter Kluwer’s 2019 Regulatory & Risk Management Indicator, 85% of respondents from US banks and credit unions rank data privacy issues as one of their biggest concerns, with 78% of respondents mentioning cybersecurity as the next immediate priority.
With the growing number of cybersecurity 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.
Here are just a few excerpts from federal laws that mortgage operators must follow in order to stay compliant:
There are several organizations and commissions that enforce customer data protection rules, including the SEC, Financial Industry Regulatory Authority, Inc. (FINRA), and Consumer Financial Protection Bureau (CFPB). As mentioned, if mortgage companies fail to secure customer data, fines from these various authorities can add up tohundreds of thousands of dollars.
As a mortgage broker or loan officer, you inevitably store lots of 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’s safe.
Here’s how Shape protects your clients’ data at all times:
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.
Unfortunately, some CRM systems disregard those regulations completely. In a bid to attract more customers, they offer unlimited texting, calls, and email messaging—without fully thinking through how this could put the user’s business at risk.
On top of that, certain sales workflows built into your CRM may be detrimental to your business, without you even realizing it. For example, if you surpass your network provider’s (typically hidden) limit on daily text messages, your business phone number or domain can be flagged as “fraud” every time one of your agents tries to connect with a prospect.
And no one answers for spam.
This issue is hard to discover right away, but make no mistake—your response rates will plummet if you don’t nip it in the bud.
By taking the time upfront to question your CRM vendor and choose a fully-compliant system, you help your team get the most out of every communication channel, without breaking any federal regulations or ruining your credibility.
At Shape, we keep close tabs on all the latest regulations in the mortgage industry so you can focus on growing your business.
Here’s how Shape’s best-in-class features help more mortgage companies protect their business:
If you’re like most brokers, you’re 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.
Violation of these acts alone could lead to hundreds of thousands of dollars in fines.
So, what does this have to do with your CRM?
If even only one member of your team uses your CRM to make false claims or provide inaccurate information when working with potential borrowers, it can put your entire company at risk. And if your CRM does little more than document the evidence, it’ll end up hurting your business more than it helps.
A good CRM, on the other hand, will help your agents stay accurate and diligent when communicating with clients and leads.
It’s a tough task to train your agents in a subject as complex as compliance but as the team owner, it’s up to you to help bring their conversations up to standard.
Here’s how Shape helps you stay compliant when marketing your business:
You didn’t think we were done, did you?
Every stage of the loan process: origination, underwriting, closing, and post-closing, is subject to a detailed set of regulations.
And there’s no excuse for cut corners.
At the loan origination stage, you need to ensure that your customer provided all the necessary documents before moving to the underwriting stage. In that same vein, you can’t move past underwriting before the pre-qualification process is complete.
Filing inaccurate loan applicant data might feel like a minor thing in the moment but if you’re 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.
With Shape for mortgage, you can easily track the status of every person in your database and securely store the most relevant borrower data at all times.
Here’s a list of questions you can use to quickly assess whether your mortgage CRM helps you stay compliant, or if it might be time to start looking for a more secure solution:
Since the earliest days of Shape, it was clear to us that a powerful CRM doesn’t just automate your marketing. It has the power to securely and confidently help you reach the next level in your business.
At Shape, we regularly track changes to mortgage regulatory laws and provider guidelines to make sure our system is as secure as possible. Because if your CRM makes you feel uncertain about your business, all the features in the world won’t be enough to help you move forward with confidence.
Ready to see how easy compliance can be? Sign up for your free 14-day trial of Shape today!