Articles

In “Preparing for the Unexpected – Getting in Front of Major Risks Through an Enterprise Risk Management Framework,” published in the December 2017/January 2018 issue of HousingWire, Jim Jorgensen highlights the importance of a robust enterprise risk management (ERM) framework for lenders. Drawing on Susan Schmidt Bies’s insights, he emphasizes that effective risk management can help avoid pitfalls like those seen during the Great Recession. Jorgensen advocates for the COSO framework, which aligns risk management with organizational strategies and encourages open communication about risks.

In “Distinguishing Between a Real Internal Audit and an ‘Imitation’,” Chris Ortigara outlines essential considerations for independent mortgage companies seeking external support for their internal audit functions. She emphasizes the importance of starting conversations with certified professionals, as a solid understanding of internal audit concepts is critical. Ortigara clarifies that the International Institute of Internal Auditors (IIA) sets the standards, not regulators or investors. The article explores the “three lines of defense” model, where internal audit serves as the independent third line assessing risks across functions.

In their article “Effective Partnerships Between Banks and Marketplace Lenders – Managing Third-Party Risk,” published in the November/December 2016 issue of Illinois Banker, Chris Ortigara and Jim Shankle explore the evolving landscape of marketplace lending. They highlight how banks are shifting from viewing fintechs as potential disruptors to recognizing the value of collaboration. The authors emphasize the importance of three critical components in managing third-party risk: the fintech’s Compliance Management System (CMS), vendor management processes, and the testing of proprietary platforms. By ensuring strong oversight of these areas, banks can mitigate regulatory risks and foster successful partnerships with fintech companies, ultimately enhancing their service offerings in an increasingly competitive market.

Liza Warner’s article “Compliance Management – Working Smarter,” published in the July/August 2016 issue of ABA Bank Compliance (now ABA Risk and Compliance), discusses effective strategies for managing the compliance function in the face of ongoing regulatory changes. Warner emphasizes the importance of a robust Compliance Management System (CMS) that fosters a proactive compliance culture. She outlines key elements such as clear accountability through a three lines of defense approach, the integration of preventive and detective controls, and the need for effective training and vendor risk management.

In his article, “What Is Your Time Worth?” published in Mortgage Compliance Magazine in the June 2017 issue, Todd Krell discusses how you can have a more effective quality assurance program. He emphasizes the importance of evaluating the time savings associated with quality control functions, particularly when outsourcing these services. Krell highlights three key areas where time considerations are crucial: responses to findings, reporting and governance, and monthly reviews of vendors.

In her article, “Unprecedented Times Call for Unprecedented Leadership – Advice for General Counsel from General Counsel,” published in California Mortgage Finance News in the Spring 2017 issue, Monika McCarthy shares the advice of General Counsel colleagues on the challenges impacting the mortgage industry.

In her article “Best Practices for the Consumer Complaint Management Program,” published in the March/April 2017 issue of ABA Bank Compliance (now ABA Risk and Compliance), Liza Warner discusses best practices for managing consumer complaints in banks. Learn more about how banks can more effectively meet their strategic business objectives and manage regulatory risk.

The ABA announced in the September-October 2018 issue that Liza had won the prestigious APEX writing award for this article in the How-to-Writing category. We appreciate the ABA’s submission of this article to APEX.

In their article, “Preparing for CFPB Servicing Exams, Avoiding Common Mistakes With Servicing Transfers and Private Mortgage Insurance,” published in the February 2017 issue of Mortgage Compliance Magazine, Chris Ortigara and Jim Shankle highlight key areas for mortgage servicers to focus on when preparing for CFPB exams. The article identifies common mistakes related to servicing transfers, loss mitigation, and private mortgage insurance (PMI) compliance. Servicers are encouraged to implement best practices, improve document retention, and ensure that both regulatory and investor requirements are met to avoid penalties during CFPB examinations.

In her article, “The Second Line of Defense: Are the Stars Aligned?” published in ABA Bank Compliance (now ABA Risk and Compliance) in October 2016, Liza Warner emphasizes the importance of aligning the first and second lines of defense in managing compliance risk. The first line, responsible for daily operations, relies on the second line for oversight, guidance, and monitoring. Effective collaboration between these lines creates a strong compliance program where risks are well-managed. Warner stresses that this alignment is essential for embedding compliance into an institution’s culture, ensuring regulatory adherence and organizational protection.

The article “Are You Integrating TRID into your Quality Control Process?” by Todd Krell and Chris Ortigara, published in California Mortgage Finance News in Summer 2016, discusses the importance of incorporating TRID (TILA-RESPA Integrated Disclosure) into mortgage quality control (QC) processes. While GSEs don’t require TRID reviews, the article stresses that lenders should still audit for TRID compliance to avoid penalties and potential loan refusals from investors. Lenders need to assess factors like past compliance issues and investor expectations to determine the scope of TRID audits. Given TRID’s complexity, with over 140 provisions, lenders must decide whether to review all provisions or just key ones. The authors emphasize that, though TRID reviews can be time-consuming and expensive, the cost of neglecting them could be far greater in the long run.

The article titled “Best Practices for Establishing a Cost-Effective Internal Audit Function” by Heidi Wier, published in Mortgage Compliance Magazine June 2016 issue, provides insights on implementing internal audit in the mortgage industry. Wier discusses how heightened regulatory scrutiny, particularly following the 2008 financial crisis, has pushed both public and non-public mortgage companies to enhance their corporate governance through effective internal audit functions. She highlights the role of internal audits in meeting expectations set by the Consumer Financial Protection Bureau (CFPB), government-sponsored enterprises (GSEs), and other investors, emphasizing the importance of independence and risk management in internal auditing processes.

The article titled “Internal Audit – Where Does It Fit in the Compliance Puzzle?” by Chris Ortigara and Jim Shankle, published in the January 2016 issue of Mortgage Compliance Magazine, offers a comprehensive guide to understanding the role of the internal audit function in the broader compliance framework. It addresses the confusion mortgage lenders often face in distinguishing between quality control, the Compliance Management System (CMS), and internal audit, especially after the Dodd-Frank Act. The article emphasizes the importance of an independent internal audit function and explores various options for implementing it, from in-house departments to outsourcing, while highlighting the need for a comprehensive, well-documented audit plan to meet Fannie Mae and Consumer Financial Protection Bureau (CFPB) expectations.