The State Of Remote Work In Mortgage

REGULATIONS ARE CATCHING UP WITH REMOTE WORK, ARE YOU PREPARED?

By VANESSA BODNAR , Special To Mortgage Women Magazine

State regulators are starting to catch up to how the industry has been conducting business. With new regulations already in place and more on the horizon, we must be prepared for a new season of regulatory compliance.

The COVID-19 pandemic taught us many things, but one of the main lessons learned is that our employees not only can work from home, but many are thriving while providing companies with additional nationwide resources. The mortgage industry has been pushing for the freedom to work from alternate nonlicensed locations for many years.

During the pandemic most state regulators took a “no-action taken” stance for those who were forced to work remotely. Now that COVID-19 guidance is ending, state regulators have started to pass regulations allowing for originators to continue to work from home or an alternate unlicensed location.

According to LinkedIn, the percentage of remote positions posted to its site increased 1.9% at the start of the pandemic to 15.3% in August 2021. In an industry experiencing turmoil, it will be important for a lot of lenders to offer remote work to loan originators.

In recent guidance, issued by The American Association of Residential Mortgage Regulators (AARMR) named Best Practices for Permitting Employees to Work Remotely, AARMR asked state agencies and business owners to take another look at pandemic policies, saying, “… the lack of consumer complaints and the ability to conduct examinations indicate that loan originators and others can work at home safely and effectively if a company is able to provide systems that protect consumer privacy and ensure regulatory compliance.”

2023 Remote Work Mortgage Licensing Outlook

Over the course of 2022, many states have added provisions into their regulations that will allow remote work from home or an alternate unlicensed location. However, some have either remained silent on this issue or rescinded their no-action- taken guidance. For instance, South Carolina of Consumer Affairs has indicated that as of Jan. 1, 2023, it will rescind its guidance allowing mortgage originators to work remotely to now requiring them to work from a licensed location. However, we expect most state regulators to make their previous COVID-19 guidance permanent. My question to you would be, are you ready for the requirements mortgage loan originators are licensed, we are assuming that most of them work from their residences if not at a licensed location.

Remote Work Policies And Procedures

As with any business practice, you must have clear and concise policies and procedures (P&P). These P&Ps not only need to be available to the regulators during examinations but also uploaded to the Nationwide Multistate Licensing System (NMLS). Your remote work P&P should include the following:

• A residence cannot be held out as a branch office. This includes printing a residential address on marketing materials, loan documents, or social media

• Employees should not meet consumers at their residences but rather a licensed location

• Physical records should be kept at a licensed location

• Loan documents should only be submitted through a secure delivery method

• Electronic records should be encrypted and maintained by the corporate office in many remote-work regulations? Let’s take some time to understand what will be required to allow our employees, specifically originators, to continue to work from home.

Of note: It’s important that you check your state regulations and guidance and consult with your legal department. For the purposes of this article, depending on where

• Workspaces need to be kept private from other home occupants and visitors. Remember your clean desk policies apply to working from home as well!

• Employees must be aware of the company’s safeguards for data privacy and security

• Employees business activities must be monitored; for instance, you will need to track who is doing licensable activities and where those are happening

Remote Work Training Program

One of the most elusive yet important components of these requirements that are now part of many state regulations is a need for an annual remote work training program and policy agreement.

The training program will need to include information regarding security and data systems, how to submit loan documents, your company’s clean desk policy, what constitutes as licensable activity, monitoring business activities and more.

Unfortunately, compliance training companies have yet to put anything out that would fully cover this requirement. To meet this requirement, you may have to develop your own in-house training video or webinar.

Annual Review And Examination

After you have put your remote work policy and training in place, you will want to have an annual review to ensure all remote workers are accounted for and everyone is compliant with the rules of working from home. This annual review will also need to include any regulatory updates.

In addition, you will want to be sure this is part of your onboarding program and integrated into your compliance training program. You will also want to retain annual acknowledgement of the policy and training program.

Additional Considerations

While regulations may not require other provisions to be put into your P&Ps, I encourage you to partner with your human resources (HR) department to add the remote work P&P into the company handbook. The handbook should also include creating clear working hours, communication and responsiveness expectations, a designated work area (away from other residents), security requirements, office supplies, a clear policy regarding obtaining a printer and if it’s required specific to the employee’s role, and whether a shredder or shredder service is needed.

As we navigate full-time or hybrid remote work, we also want to acknowledge that no P&P or training program will be beneficial to our employees if we aren’t engaged with them and providing leadership. It’s important to consider how your employees will continue to feel engaged and supported without the traditional face-to-face approach.

You can accomplish this by instituting a solid one-on-one program and perhaps a daily or biweekly huddle to catch up and find out what’s going on with your teammates. Whichever you decide, you will never go wrong investing your time and energy into your employees. n

Vanessa Bodnar is the licensing manager for Homespire Mortgage.