Representative Engagements
Anti-Money Laundering/Countering the Financing of Terrorism
CrossCheck performs Anti-Money Laundering/Countering the Financing of Terrorism independent audits for the various client segments it serves. Our approach is based on the examination guidelines published by the Federal Financial Institutions Examination Council (FFIEC) and FinCEN requirements. An independent audit provides management with an unbiased assessment of compliance with the anti-money laundering requirements and raises the state of regulatory compliance within the institution. The recommendations we provide help improve operational and compliance controls.
Client Type
Regional Bank ($10 – $50 billion in assets)
Intermediate Bank ($1 – $10 billion in assets)
Community Bank (<$1 billion in assets)
Mortgage Banking – Originator
Mortgage Banking – Servicer
Consumer Finance
Service Type
Independent Audit
Audit Co-Source
Continued growth and increased regulatory scrutiny prompted a client to have CrossCheck assist them with the implementation of an internal audit function. After developing an audit charter, performing an audit risk assessment, and providing a multi-year internal audit plan, we assigned experienced internal audit consultants to complete the audit plan. The goal of an internal audit is to identify areas for improvement in the institution’s control environment, policies, procedures and practices, and to provide practical, sustainable recommendations that address the root cause of issues identified. Each internal audit consultant assigned to the engagement was equipped with the knowledge and experience needed to fully understand the functional area being audited and make value added recommendations. In addition to completing the audit plan each year, we regularly provide reports to the Audit Committee of the Board of Directors, and provide ongoing consultation to the institution as needed.
Client Type
Intermediate Bank – ($1 – $10 billion in assets)
Community Bank (<$1 billion in assets)
Credit Union
Mortgage Banking – Originator
Mortgage Banking – Servicer
Service Type
Audit Function Development
California Department of Financial Protection and Innovation (DFPI, formerly DBO) Per Diem Interest Audit
Assisted a large mortgage lender defend allegations by the Department of Business Oversight that it had not properly computed per diem interest on California loan closings. The lender engaged CrossCheck to perform an audit of a sample of loans selected by the DBO and recompute the per diem interest. Our findings and insights helped the lender favorably resolve the allegations with the DBO, improve their processes and avoid significant fines.
Client Type
Mortgage Company
Law Firm
Service Type
Compliance Audit
CFPB MOU Remediation
After receiving a memorandum of understanding (MOU) from the CFPB, one of the largest independent mortgage originator/servicers engaged CrossCheck – upon CFPB non-objection – to conduct a look-back of several thousand loan modifications made over a two-year period. We reviewed each modification to determine if fees assessed and cash contributions granted as part of the approved loan workout were calculated and disclosed properly to the borrower. Detailed reporting, including identifying refunds to affected borrowers, was provided to the CFPB. As a result, the client was able to meet the CFPB’s requirements in a timely manner.
Client Type
Mortgage Banking – Servicer
Service Type
Compliance Consultation – Issue Remediation
CFPB Readiness Exams
With implementation of the Dodd-Frank Act, mortgage companies became subject to examination by the Consumer Financial Protection Bureau (CFPB). Mortgage originators and servicers alike have engaged CrossCheck to assess their readiness for these examinations. Our approach for the review is based on the CFPB examination guidance and our findings enabled the originator/servicer to remediate issues prior to the exam thereby improving their compliance management system and reducing the potential for regulatory criticism.
Client Type
Mortgage Banking – Originator
Mortgage Banking – Servicer
Service Type
Compliance Consultation
Compliance Management Systems (CMS)
As non-depository mortgage entities and fintechs align their internal control structures with the expectations of the CFPB, numerous clients have engaged CrossCheck to perform compliance management system (CMS) assessments of the two interdependent control components of an effective CMS which include:
- Board and Management Oversight; and
- Compliance Program, which includes:
- Policies and procedures;
- Training;
- Monitoring and/or audit; and
- Consumer complaint response
Our approach is based on the CFPB supervisory guidance and industry best practices. Our findings assist the client in strengthening the pillars for a more robust, fully operational and sustainable CMS.
Client Type
Mortgage Banking – Originator
Mortgage Banking – Servicer
Fintech
Service Type
Independent Compliance Review
Compliance Policy and Procedures Development
As the regulatory environment and the requirements imposed on financial institutions continue to evolve, CrossCheck has been engaged by a variety of mortgage entities and community banks to review and enhance compliance related policies and procedures. This has also included the development of required policies that previously did not exist, enabling the client to strengthen the governance and internal controls within the organization.
Client Type
Community Bank (<$1 billion in assets)
Mortgage Banking – Servicer
Service Type
Compliance Consultation
Fair Lending and UDAAP Audit Program Development
One of the pillars of an effective fair lending compliance management system (FL CMS) is the independent review or audit of the fair lending and responsible lending program. We assisted the company’s internal audit function in developing audit programs to assess the effectiveness of fair lending and Unfair, Deceptive or Abusive Acts or Practices (UDAAP) risk management efforts. The audit program addressed both loan origination and servicing processes and was based on the Consumer Financial Protection Bureau’s examination procedures and industry best practices. We conducted management interviews to ensure a clear understanding of the products and services in order to tailor the audit program to the company’s activities. These interviews provided the ancillary benefit of added fair lending awareness for the management team and the internal audit function. The mortgage company received a customized audit program designed to address fair lending and UDAAP risks associated with their business model.
Client Type
Mortgage Company
Service Type
Program Review / Audit
False Claims Act Lawsuit
Realtors, on behalf of the federal government, brought a False Claims Act lawsuit against one of the largest mortgage servicers, alleging they had not properly performed HAMP modifications. CrossCheck reviewed and responded to the realtors’ allegations, providing expert testimony that helped the client achieve a favorable settlement.
Client Type
Mortgage Servicer
Law Firm
Service Type
Expert Testimony
Foreclosure Management Look-Backs
CrossCheck has executed numerous default management and foreclosure reviews. The objectives for these reviews aligned with the lookback requirements outlined in the Consent Orders issued to the 14 largest loan servicers in 2011. Each review included the requirements set forth by the CFPB related to early Intervention with delinquent borrowers, continuity of contact, loss mitigation procedures, and foreclosure processing. These reviews have kept the clients in compliance with regulatory requirements and allowed the clients to improve their operational controls.
Client Type
Regional Bank ($10 – $50 billion in assets)
Mortgage Banking – Servicer
Service Type
Loss Mitigation
HMDA Data Integrity
We have assisted numerous mortgage companies in validating the accuracy of Home Mortgage Disclosure Act (HMDA) data previously submitted or in preparation for an upcoming submission. Our approach to HMDA data errors and omissions testing integrates systemic data routines to identify conflicts between loan origination systems (LOS) and HMDA data. Identifying statistical anomalies or “red flags” when compared to peers and/or national aggregate data is a first step that helps focus the review. Through this approach we are able to ascertain the root cause of identified data issues, provide the framework for enhancing system controls, and enabling automated corrections to the LAR resulting in improved data integrity today and for future submissions.
Client Type
Mortgage Company
Service Type
HMDA Data Integrity
Internal Audit Plan Development and Risk Assessment
Continued growth and increased regulatory and investor scrutiny have prompted a number of mid-size, private non-depository mortgage servicers, originators, and fintech companies to implement an internal audit function. CrossCheck deploys experienced and certified internal auditors to assist with development of an internal audit plan including a risk assessment, audit schedule, and management and board reporting. CrossCheck also executes the plan and provides consultation to the institution as needed on a full out-sourced or co-sourced partner arrangement. As a result, clients have an understanding of the key operational and compliance risks in their company and are successful in meeting investor (e.g. Fannie Mae MORA), state, and CFPB requirements.
Client Type
Mortgage Banking – Originator
Mortgage Banking – Servicer
Fintech
Service Type
Audit Function Development
Mortgage Electronic Registration Systems, Inc. (MERS®) Independent Audit
Institutions with more than 1,000 mortgage loans registered with MERS® are required to have an independent third party monitor their process for obtaining, retaining, reconciling, and submitting mortgage registration data against their MERS® quality assurance plans. We have performed this role for a number of servicers, providing both the servicer and MERS® with an unbiased evaluation of the servicer’s procedures for complying with MERS® rules and requirements. Additionally, as servicers near the 1,000 registered loan threshold CrossCheck has assisted in developing and implementing the procedures needed to successfully meet the MERS® annual requirements.
Client Type
Mortgage Banking – Servicer
Community Bank (<$1 billion in assets)
Intermediate Bank ($1 – $10 billion in assets)
Regional Bank ($10 – $50 billion in assets)
Large Bank (over $50 billion in assets)
Service Type
Operational Audit
Mortgage Electronic Registration Systems, Inc. (MERS®) System to System Reconciliation
Mortgage servicers are required to reconcile its System of Record to the MERS® System data monthly or quarterly if servicing fewer than 1,000 mortgage identification number (“MIN”) records. CrossCheck completes this reconciliation quickly and seamlessly ensuring all the required data elements including “required and conditionally required fields” are reconciled to the MERS® system. Once the data extracts are provided, CrossCheck’s data engineers complete the reconciliation and provide detailed reports of the differences identified so they can be remediated.
Client Type
Mortgage Banking – Servicer
Community Bank (<$1 billion in assets)
Regional Bank ($10 – $50 billion in assets)
Service Type
Operational Audit
Portfolio Purchase for Large Nationwide Mortgage Company
A national mortgage lender sought to acquire several mortgage companies. Our client asked us to review samples of loans from each prospective acquiree to evaluate loan quality, for both underwriting and compliance, prior to moving forward on the acquisition.
Client Type
Mortgage Companies
Service Type
Portfolio Acquisitions
Predatory Lending Litigation
A borrower sued the client, a national mortgage lender, alleging that the lender engaged in predatory lending and loan flipping. CrossCheck reviewed the underwriting of the subject mortgage loan and provided expert opinions on the quality of the underwriting (including the borrower’s ability to repay), benefit to the borrower, and suitability of the type of loan. As a result, the client was able to achieve a favorable settlement of the case.
Client Type
Mortgage Banker
Law Firm
Service Type
Expert Testimony
Securitization Due Diligence
In anticipation of securitization, multiple clients have engaged CrossCheck to perform due diligence on non-QM portfolios. The reviews are designed to meet rating agency requirements and included analyses of credit, compliance, collateral, and data accuracy.
Client Type
Mortgage Companies
Service Type
Rated Securitizations
Training
Clients taking a proactive approach or responding to regulatory finding have engaged CrossCheck to prepare and conduct a variety of training sessions for business lines, senior management, and board committees. Training topics included Home Mortgage Disclosure Act; Community Reinvestment Act requirements; Bank Secrecy/Anti-Money Laundering, and loan servicing rules. As a result of the training, clients have enhanced internal training curriculums and procedural documentation.
Client Type
Community Bank (<$1 billion in assets)
Mortgage Banking – Originator
Mortgage Banking – Servicer
Service Type
Compliance Consultation
