The Texas Department of Savings and Mortgage Lending has a transparent examination process. Early in the tenure of your license - usually within the first 6-12 months of issuance - you will receive a notice of examination based on the contents of the Texas Compliance Guide:
Loan Files
Use your Compliance Audit Checklist to ensure you include all required Texas exhibits in your loan files. Please DO NOT ASSUME that the files you pull back from your lender have everything in them. Most often, they do NOT have your required exhibits.
Manager's Questionnaire Exhibits
We pull all of the items requested here from your Mortgage Broker/Non-Delegated Correspondent package.
If you need assistance in locating items, we can easily help you locate them, but they are also referenced here in the rubric of compliance items:
Texas-Specific Disclosures
Texas requires business-specific disclosures available on the TX SML Website.
Do NOT forget to scrub your files to ensure YOU (not the wholesaler) have provided these critical forms. It's an easy target:
1.) Special Notice - We may broker your loan/Complaint Notice
2.) Website Notice - Should also put in your files
3.) Warning - False statements
4.) Dual Agency Disclosure
5.) Pre-qualification (pre-approval) Format for Texas
6.) Approval Notification for Broker/Non-Del
NOTES:
At the end of the examination, you will receive a report. One of the peculiar findings is that the regulator adds a list of all required policies that you must maintain. They only request a few of these as part of the examination, but reserve the right to ask for them. This IS NOT a finding, merely a requirement re-statted.
The examiner continues to request that individual policies (such as ID Theft Red Flag 2-93, part of 2-9 IT Security) have the phrase "this plan will be updated periodically, and as things change..." This is covered in the IT Security Plan under "change management." The purpose of grouping these related policies together is to avoid having redundant policy statements throughout the plan.
The IT Security Officer is listed under 2-90 IT Security Plan Personnel.
The Privacy Notice must go out on ALL Loan Files BEFORE you share the customer's information. The Policy is in the Compliance Module 2-43 GLB Privacy, and the Review Checklist is in your QC Plan - Section 6 - Post Closing Compliance Review - Checklist under Privacy Notice.