Finding success as a mortgage broker may be a challenge for some. Brokers need to be legally compliant with the most delicate details while also being competitive in an industry that will continue to see steady growth this decade. Mortgage brokers need to establish solid best practices and procedures while also staying up to date on trends and education.
Rounding up a series of best practices as a mortgage broker can help provide a path to success in the mortgage industry. Here are some of the most critical best practices to work with as a mortgage broker.
Being entirely compliant in legal terms is one of the most challenging parts of a mortgage broker's job. Professionals in the industry need to comply with state licensing requirements, such as mortgage surety bond agreements, and continuing education.
But compliance also includes more innovative and nuanced requirements, including staying up to date on any new federal rules related to the SAFE Act. The act "prohibits individuals from engaging in the business of a residential mortgage loan originator without first obtaining and maintaining annually" a state license and registration, according to the Consumer Financial Protection Bureau (CFPB). Compliance may be challenging, but mortgage brokers can achieve it by keeping their licenses current and their practices above board.
A mortgage broker should abide by their clients' directives ethically and legally, going above and beyond to accomplish the goals articulated by their clients.
Transparency with clients is both a moral and legal necessity. Giving all parties a fair and professional response to their mortgage pays off by keeping brokers out of legal hot water and creating a dependable reputation amongst other industry professionals. Lawsuits, such as those dealing with lending discrimination or errors with paperwork or processing, can easily turn into costly claims from clients. Working with transparency and carefulness can help mortgage brokers stay productive, legally sound, and free of significant financial loss.
Mortgage Broker Insurance helps provide professionals in the brokerage industry with the coverage they need to pay for those claims noted above if they do occur. While the goal should be to prevent claims, knowing they have a safety net in place helps mortgage brokers work confidently.
Mortgage Broker Insurance covers errors and omissions, or individual risks related to the brokerage industry. E&O coverage is tailored with brokers in mind and protects them from mistakes that can occur during the entire loan process. Even if a court dismisses a case, it can still invoke significant financial and reputational damage to a mortgage broker. Having this insurance provides a financial backstop to help pay for legal fees and settling allegations of negligence.
Brokers must continue to educate themselves about their industry and services with continuing education classes mandated by their state. Usually, just an eight-hour course taken on annually, each state provides resources for brokers to stay educated and updated on their region's latest requirements. But apart from these mandatory courses, brokers need to go beyond what's necessary and build on their knowledge in more ways.
From attending workshops to online courses, brokers have many options for developing their knowledge and refining their skills. These workshops and extra classes can help brokers stay in touch with their peers, the developments of the industry, the latest trends, and the latest business strategies.
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (877) 787-5258 to speak with one of our professionals.