Providing adequate training on compliance

by MPA02 Jul 2014

By David Lykken
Special to MPA


It seems that more and more I'm hearing stories of lenders who are caught off guard when auditors get around to examining them. Some lenders can't seem to understand how they missed certain things or don't really know why exactly they're doing thing incorrectly. I've come to believe that nine times out of 10, it all comes down to training.
In a recent radio show, I was discussing compliance with my guests and co-hosts. An example of an organization was brought up that had an extremely short document of policies and procedures – four pages! Why an organization would think that it could adequately train its people on the complexities of industry regulations within a four-page document is beyond me.
When we consider training for LOs, we often think of it in terms of sales training. We want to make sure our people are well-equipped to out there and close deals. We want them to have great product knowledge and interpersonal skills. Of course, I am all for this kind of training. A business without production is, well, not a business.
But the training that is often overlooked is the equally important training for compliance. It's important that LOs and other members of the organization understand the rules before playing the game. Should you have document on policies and procedures that you distribute? Absolutely! And I would make it as detailed as possible. But I would recommend a training session for your team on at least a monthly basis. The more knowledgeable your team is about the changes to regulation, the better your organization will be equipped for staying in compliance.
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” ( that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.


  • by Gordon Schlicke. | 7/7/2014 9:32:14 AM

    Here in Washington State we include analyses of real compliance lawsuits to give students a chance to apply the law to a specific set of circumstances. Small study groups reach conclusions as if in a jury. Then we review the actual verdict to learn how the rules were applied. It helps give students more depth. Just teaching rules is cumbersome and boring. I've been preparing these cases for years and they are quite popular. Gordon Schlicke, CE Forward.


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