Disclaimer: The information provided in this site is not legal advice, but general information on audit, compliance and legal issues commonly encountered by Mortgage Companies. Greenlight Compliance's Service is not a law firm and is not a substitute for an attorney or law firm. Greenlight Compliance cannot provide legal advice and can only provide self-help services at your specific direction
Once you begin the mortgage quality control and compliance
process, you are going to need gather certain
documents that will be required for your internal audit and compliance check. The most common
supporting documents are:
1
Articles
of Incorporation & State Qualifications
2
Corporate Financial Statements
3
Surety Bonds
4
Closed Mortgage Files
5
Advertising and Marketing Materials
Each state maintains its own list of requirements in order to maintain a mortgage license
in that state, so more items may be required.
The time required for each internal audit varies by the amount and condition of the files that have been maintained.
Additionally, Certain states require more information than others and therfore take longer to
review and process. Call
us to discuss the processing times of the
specific states you are interested in.
Each state varies slightly in its definitions
of mortgage broker and mortgage banker or
mortgage lender. A mortgage broker generally
acts a middle man and does not close loans
in its own name. A mortgage banker generally
has its own line of credit available that
it uses to fund its own loans. In certain
states, a mortgage banker does not have to
disclose certain fees that it makes on the
back end. A mortgage banker also has the ability
to generate additional income by selling loans
in bulk. These different types of licenses require different compliance requirement and audit procedures.
A mortgage warehouse line of credit credit
is a short-term revolving line of credit providing
interim financing for a mortgage lender/banker,
that will be transferred to an end investor.
A mortgage warehouse line of credit allows
a mortgage company to close a loan in its
own name and to time the sale of its mortgage
loans thereby becoming an additional potential
source of income and receive basis point pricing
advantages and reduced fees. A mortgage line
of credit can also reduce the dependence on
a third party lender and quicken the ability
of that mortgage company to make the mortgage
loan. In sum, a warehouse line of credit provides
potentially quicker turn times and potentially
more profit on each mortgage loan. But, mortgage
lines of credit may not be appropriate for
all clients and if not utilized properly can
be a source of risk. We are available to assist you with conducting an internal audit of the loans funded with your mortgage line of credit. Call us today to discuss
obtaining a warehouse line of credit for your
company.
Copyright 2006 Greenlight Compliance &
Licensing, Inc.
