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Regulatory Compliance - Representative Engagements

FHA Exam Readiness

An FHA lender requested branch audits of several sites operated by one of the client’s affiliates. This review was in anticipation of an upcoming FHA audit. We performed detailed file reviews of 31 FHA loans and assigned two consultants to perform the onsite branch audits which entailed a review of regulatory compliance, including adherence to HUD departmental rules and regulations, and company policies, procedures and regulations. Many of our findings related to documentation errors and inconsistencies, indicating that adequate quality control—both prefunding and post-closing— were not present. We assisted the client in updating its quality control plan, making sure that thorough prefunding and post-closing quality control procedures were put in place.
 

Procedure Documentation

As a result of a recent exam by the regulator, a regional community bank requested CrossCheck to write its policy for the Allowance for Loan and Lease Losses (ALLL) and related processes. Through detailed interviews with applicable management and key personnel and review of pertinent documentation and regulatory requirements, we drafted comprehensive policies for the bank. The policies drafted included not only the ALLL, but an asset classification and loss mitigation policy as well. These policies were presented to the bank’s supervising regulator and were approved by the board of directors. The engagement provided the bank with comprehensive documentation that can be used to strengthen its operations while at the same time reducing overall risk exposure.