Ethics for Home Lending Ethics for Home Lending Cliffco Mortgage Bankers has been lending responsibly more than 28 years, delivering accurate information and making the process of how to get a mortgage loan easy for our customers. We pride ourselves with being fully transparent and compliant with the new stricter federal regulations for the home loan process by implementing our own internal policies.
Conflicts, and Ethics, and Bribery! The hairs on the back of your neck may tingle; or, you may become warmer, or colder; or you may feel a bit of perspiration on your forehead — but something tells you to stop and take a second look before the next step.
You may not be able to put your finger on it, but, you can feel when the situation is just not right, and you may be facing a conflict of interest, an ethical dilemma, or the offer of an unacceptable gratuity.
Each day you face many situations where you act with no thoughts about whether it is ethical or not.
Some situations, though, are more subjective and require some thought about what rules guide acceptable behavior. Where there are no specific rules, how do we determine the best course of action? The accusations were based on his possible conflict of interest.
In another example, a mortgage loan originator makes an exception to policy for the terms of a home purchase loan. The relationship creates a conflict of interest that should preclude the originator from executing loans for family members.
A conflict of interest could be defined as a situation that occurs when a person or company acts in a manner to promote self-interests rather than the established best interest of the business or customer.
A conflict of interest may cause a situation that is unethical, that violates current policy or the law, or all of the above. Commercial banks must follow specific rules about conflicts of interest, and, the bank regulatory agencies publish guidance and require policies supporting conflict of interest management.
While the Consumer Financial Protection Bureau CFPB has not published separate guidance specifically for conflicts of interest, it incorporates the standards of managing conflicts of interest in publications issued for the entities it supervises and its own activities.
Certain conflicts of interest violate either federal laws or state laws, or both. Dealings involving insiders — Dealings with persons or entities connected with the [company] in a way that might affect its judgment represent a potential conflict of interest or self-dealing activity.
Inappropriate financial benefit — A [company] may gain an inappropriate financial benefit if it generates additional fee-based business for itself or an affiliate in one of the following ways: If a [company] obtains financial benefits including goods and services from a service provider whether affiliated or notthe benefits must be authorized and must not be provided in exchange for using that provider.
Systems should be sufficient to alert the [company] when a [company] employee serves [a customer or vendor of] the [company] for a fee, competes with the [company], receives loans from fiduciary clients, accepts gifts or bequests from fiduciary clients, receives goods and services from vendors, or executes personal securities transactions that are counter to the best interests of account beneficiaries.
Bribery is typically considered illegal and can be punishable by jail time or stiff fines if authorities find out about the bribe. Even a gift or gratuity of little monetary value, if it influences the actions of the receiver, could be considered a bribe.
Some organizations follow IRS guidelines for de minimis benefits. Commercial banks are governed by the federal Bank Bribery Act, which prohibits commissions or gifts in various situations — offering loans or gratuities to financial institution examiners, acceptance of loans or gratuities by financial institution examiners, any receipt or commission or gift for procuring loans, and others.
Most states also have laws about bribery, conflicts of interest, or other inappropriate business behavior. Other monetary or in-kind gains can be illegal when obtained through a financial service.
With respect to federally-related residential real estate secured loans, the Real Estate Settlement Procedures Act RESPA prohibits kickbacks and unearned fees given or accepted in connection with a settlement service. Codes of Ethics or Conduct — The stated commitment to and general guidelines about ethics, conflicts of interest, and other expectations are the starting point.
Most large companies have a published code of ethics—a set of general guidelines to encourage employees to behave ethically and responsibly and others may implement a policy of the same nature.
Smaller institutions may have a more informal approach, but, any commitment by management must be clearly communicated to all employees. Training is a good idea. Organizations often have established codes of ethics based on the industry or trade.
Monitoring and auditing for compliance — Periodic reviews of company operations or records should include compliance to ethical standards as well as legal and regulatory requirements. In any case, if the hairs on the back of your neck are bristling, proceed with caution. It could be the best pause you ever take.
What might the most recent 60 enforcement actions brought by the CFPB portend for the future?My business achievements have been many, but it is as the founder of two amazing businesses (Lending Specialists – a mortgage broking company and Loans Actually – a mortgage broking group) which help both borrowers and mortgage brokers alike to achieve their goals in the maze that is the wider financial services industry, that I am most proud.
Ethics in the Mortgage Lending Business In America each person believes it is his or her right to own a home. Banks believe they should give each person the money to finance a home. Ethics in the Mortgage Business On a regular basis, mortgage professionals make ethical decisions with each application taken.
Are the programs and rates offered the best for this consumer, or is the loan program the result of the potential for increased income? Chp. 10 - Ethics in Mortgage Lending / Video B PLAY. Ethical behavior.
adhering to a set of moral principles, to rules, and to standards of conduct. Ethics in mortgage lending. applying fundamental principles.
NATIONAL ASSOCIATION OF MORTGAGE PROFESSIONALS. Honesty and Integrity: NAMP. members shall conduct business in a manner. Ethics in the Mortgage Lending Business In America each person believes it is his or her right to own a home.
Banks believe they should give each person the money to finance a home. Ethics in the Mortgage Lending Profession. Ethical and Legal Considerations Ethics in the mortgage industry may seem like a complex issue, but it really boils down to a few simple points: Many training and educational organizations offer business ethics .