NMP - October 2016 - 57

Understanding and Mitigating Risk D KUSNER *Visual courtesy of EDRnet.com no verbiage that prohibits a lender from referring consumers to a nonaligned third parties for credit services. However on April 13th, 2012 the CFPB did release a memo regarding referring to third party services. Above is an illustration of recommended steps to be taken in order to limit the potential for statutory or regulatory violations. Risk assessment Prior to any due diligence, you have to be sure the CRO meets basic Due diligence There are key data points you can use when assessing the viability of using a CRO. The onboarding process, payment protocols and lifecycle of a client should have clear written methodologies. Consistent, ethical and practical systems should be demonstrated through manuals, scripts and Onboarding The onboarding process is critical in any business and credit repair is no exception. Compliance, customer experience and tempered expectations are three key areas every CRO should focus on. Below are some questions that will provide insights: l How are the opportunities sent to the CRO? Is the process secure? l What is their criteria for approving files for sale? What are reasons they would not offer their services? A documented vetting process protects against commission sales selling services to consumers that don't need it - which leads to the germination of most complaints generated by the industry. l Does the CRO take advance fee payment for any reason and what is their payment structure? CROs must remain compliant with the no advanced fee payment rule. l Are the CROs disclosures clear, compliant and descriptive? There should be a clear documented process that outlines these issues above. For example, in our organization, these continued on page 97 57 n National Mortgage Professional Magazine n OCTOBER 2016 Compliance We start with the topic that can make any good idea a non-starter. Risk officers are charged with the responsibility of keeping lenders out of harm's way. The Consumer Financial Protection Bureau (CFPB) is a formidable agency and nobody wants to end up on their radar unduly. Charged with supervising both Dodd-Frank and CROA, the CFPB has oversight on both industries. In review of both laws, there is The above questions are commonly asked by our partners and is similar to criteria NACSO uses when vetting compliance for our members. Most compliant CROs will be able to handily answer these questions, and if they pass this muster test you can decide if there is value moving forward with due diligence. handbooks and disclosures. Here is some criteria you can request from your vendor: NationalMortgageProfessional.com criteria. Below are a few questions that may reveal if the potential vendor is worth considering: l Are they in compliance with both CROA and their state's applicable licensing law(s)? l Do they carry a minimum bond as well as Errors & Omissions insurance? l Are they brick and mortar or virtual operations? l Do they process their own files or do they outsource to a thirdparty vendors? l What is the experience of the team and what are their qualifications as a CRO? l Do they require disclosures and is advance fee accepted for any of its services? http://www.EDRnet.com

Table of Contents for the Digital Edition of NMP - October 2016

Table of Contents
NMP - October 2016 - Cover1
NMP - October 2016 - Cover2
NMP - October 2016 - 1
NMP - October 2016 - Table of Contents
NMP - October 2016 - 3
NMP - October 2016 - 4
NMP - October 2016 - 5
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NMP - October 2016 - Cover3
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