b'Mortgage Industry Information, Opinions & TipsDRE Special Investigationsf you read the Summer, 2019, Real Estatelooking at BPC 10248 (k) 2 which statesShortages or Questionable Bulletin (available online at www.dre. (in part): If the source for the paymentCharges In Quarterly/Annual ca.gov under Publications) you are awareis not the maker of the note, the agentReport:that the DRE has ramped up their officeshall inform the purchasers or lendersThe DRE will call for an office visit or an audit visits by Special Investigators.These 2-3in writing of the source for payment. Afor even minimal shortages in the quarterly hour visits are used to determine if thebroker or servicing agent who transmitsor annual reports.I have even seen an audit Broker is supervising the activities of theto the purchaser or lenders the brokerstriggered by a $9.00 bank fee that caused company and the licensees working foror servicing agents own funds to coverthe trust account to be short by $9.00 (I kid the company. payments due from the borrower butyou not!).Questionable charges could be unpaid as a result of a dishonored checksomething as simple as a land-line phone There are some things that will trigger amay recover the amount of the advancesto an alarm system on an REO (yep, seen visit and you should be aware that thesefrom the trust fund when the past duethat, too).Make sure that anything out of practices could cause a call from a Specialpayment is received. However, this articlethe ordinary is explained by either yourself Investigator. does not authorize the broker, servicingor your CPA when the report is filed.And, agent, or any other person to issue, or tofor heavens sake, keep $200 of your own Restricted Broker-Associateengage in any practice constituting, anymoney in the trust account at all times to or Salesperson: guarantee or to engage in the practicecover bank fees!If you employ an agent who has a restrictedof advancing payments on behalf of the license, for whatever reason, expect to getborrower. Note:Trust Account, is it or isnt it?I cannot a call from a Special Investigator asking totell you how many times I visit an office and meet with both you (the broker) and theFor brokers who are advancing paymentsfind that what the broker thought was a agent.The DRE will review the agentson behalf of the borrowers, the DRE istrust account is NOT a trust account.Call transaction files for generally the last 24concerned that this not become a way ofyour bank today and get a copy of the months, ask to see the agents broker/ doing business (i.e. ongoing payments)signature card for your trust account and licensee agreement, and question theand that when it does happen (on the raremake sure that the title of the account broker and the agent separately regardingoccasion that it should), the investors areincludes the words TRUST ACCOUNT and supervision, fair housing and fair lending.made aware, in writing, of the brokersthat the bank has coded the account as a payment and the reason for the payment. TRUST ACCOUNT in their internal records. Advances on Private MoneyMake sure the bank statement shows Loans: At a minimum, all brokers should takeTRUST ACCOUNT in the account title.Make The Mortgage Lending Activities sectiona careful look at their Loan Servicingsure your checks show the words TRUST of the DRE is currently looking into annualAgreement to make sure the topic ofACCOUNT in the account name.reports (RE-881) that show advances beingadvances is covered, as in when and why provided by the broker on payments,they will be made and how they will bePam Strickland is a compliance consultant taxes, etc.They are trying to determinerepaid. who helps you prepare for the calls from if this activity violates the prohibitionthe DRE.You can reach her at pam@toward guarantees.Specifically, they arepamstrickland.com.Points of InterestFall 2019Page 41'