Mortgage Broker Case Audits and the Role of a Mortgage CRM System

Mortgage brokers play an important role by helping to link  borrowers and lenders.

However, as regulations are constantly being updated and there must  be a high level of transparency in this area, mortgage brokers are constantly under pressure to meet regulatory requirements.

One of the ways to achieve this is through case audits.

By using a Customer Relationship Management (CRM) system during the brokering process, the effectiveness of audits can be greatly improved.

We are looking to discuss the significance of mortgage broker case audits and how a mortgage CRM system can help improve and simplify the process.

The Importance of Mortgage Broker Case Audits

Case audits are essentially a review of case files in order to verify the mortgage advice process against set guidelines and rules to decide whether the advice was suitable and there was nothing fraudulent about it.

These audits are important for several reasons:

1. Regulatory compliance: Mortgage brokers and their cases are subject to an ever-growing list of regulations. Non-compliance can attract severe consequences including penalties, revoking of the broker license as well as damage to the broker’s reputation.
2. Risk management: Audits can help reveal potential risks and weaknesses in the mortgage advising and overall arrangement process. Discovering issues at an early stage means that brokers can take steps to address the issues before they become a major problem.
3. Quality assurance: Audits can also help assessing the suitability of the advice. This involves verifying the accuracy of information and documents, the appropriateness of the recommended product and the overall client experience.
4. Operational efficiency: By analysing the mortgage advice and arranging process, audits can assist brokers in optimising their workflows, reducing costs, and increasing the turnaround time.
5. Client trust and confidence: Regular audits show that the broker has nothing to hide and is willing to account for his or her actions, which may help the client to trust the broker more.

Potential Problems with Case Audits

There are various challenges that can come with conducting mortgage broker case audits as  highlighted below:

1. Volume of data: Mortgage brokers deal with a large amount of cases and every file is filled with details and documents. Manually reviewing each file can be time consuming and error-prone.
2. Complexity of regulations: The regulatory environment is always evolving, which makes it difficult for brokers to keep up, understand the changes and ensure compliance across all cases.
3. Limited resources: Many mortgage broker firms are small operations (i.e. 1-3 people) with limited resources, which makes it difficult to schedule enough time and people to conduct a thorough audit.
4. Data fragmentation: Information can be stored in different systems and databases, or in paper files, and thus gathering and analysing a case file can be quite challenging.

How a Mortgage CRM System Can Improve the Audit Process

Mortgage broker CRM platforms are  information management systems that can greatly improve the mortgage broker case audit process.

Here’s how:

1. Centralised data: A mortgage CRM system is a single platform for the storage and management of client and mortgage related information and documents. This avoids the need to look for information in different systems and ensures that all the relevant information is readily available during an audit.
2. Automated compliance checks: Modern CRM systems can be developed to perform an automatic assessment of the cases to determine their compliance with set rules. This entails checking whether all the required documents have been provided, or if there are inconsistencies or vulnerabilities, which require further examination.
3. Workflow automation: Mortgage CRM systems can also accommodate pipeline processing workflows that can help avoid some mistakes and ensure that all the necessary steps are performed. They can be used to create an audit trail to facilitate easy tracking and verification of the process.
4. Customisable audit checklists: Similarly to the above point, a CRM system can be personalised to include audit checklists relevant to the broker firm’s requirements. These checklists can assist auditors and make sure that all the important parts of the case file and process are checked.
5. Reporting and analytics: CRM platforms have reporting and analysis tools to assist brokers understand their business performance. This includes tracking case milestones, looking for trends and identifying areas that need special attention.
6. Improved collaboration: A mortgage broker CRM system can help co-ordinating work between colleagues through information and document sharing. This is also useful during audits when auditors are able to work with all the relevant staff members.
7. Document management: CRM systems may contain document management features, or a filing system, that helps brokers arrange and retrieve case-related documents quickly. This ensures that all the necessary documents are easily available whenever needed.
8. Client communication: Depending on the setup, mortgage CRM systems can monitor interactions with clients including emails, phone calls, messages, data and document sharing and meetings. This provides a full record of the communication with clients, which is useful during an audit to verify appropriateness and compliance.
9. Integration with other systems: Some mortgage broker CRM systems link with other applications including sourcing systems, ID and AML checks, loan origination systems (LOS), accounting software, etc. This integration minimises the chances of data inconsistency and mistakes, and therefore improves the efficiency of the advising and audit processes.

Tips for Getting the Most out Of Your Mortgage Broker CRM System

Below are some tips for brokers about using their mortgage CRM system during case audits:

1. Choose the right CRM platform: Choose a system that was developed for the mortgage industry and meets the needs of a mortgage broker. Consider factors such as client portal, accommodating specialist cases, sourcing integration, customer support, customisation and so on.
2. Train your staff: Make sure that all the staff members are properly trained on the system, including data entry, document generation and management, client communication, keeping records, compliance checks, and reporting.
3. Customise the system: Customise your mortgage broker CRM system to match your firm’s specific audit needs. This includes setting up your own document templates, creating your own audit checklists and workflows.
4. Regularly update the system: It is recommended that you review and update the compliance check steps and workflows regularly to ensure that they are current and appropriate. Also seek feedback from the auditors and staff members to identify any aspects that should be improved and implement any necessary changes.

Summary

Mortgage broker case audits are an essential part of the mortgage brokering process to ensure compliance, appropriate risk management, and quality of service.

Through the application of a mortgage broker CRM  system, brokers can improve the audit process, reduce costs, and meet the requirements of various regulations.

This is achieved by centralised data management, automated compliance records and checks as well as collaboration.

This is an industry where suitability and compliance are critical; so CRM systems are not just nice to have anymore – they are essential.