b'Mortgage Industry Information, Opinions & TipsDRE Audits and You:Part 4The AftermathO ver the past few months, I haveDesist and Refrain (D&R).This is a bitAccusation.If the DRE finds violations gone over the items that the DREmore serious, but still has no fine or penaltyduring an audit that rise above a mere reviews in a typical audit: Contracts,attached.It is written notice that violationswarning (either a CAL or a Cite and Fine), they Disclosures, Trust Accounts.Once they havewere found that require immediatefile an accusation.The reason for the filing of visited your office, done their fieldwork,correction.The D&R does become a partan accusation usually occurs due to violations and conducted the exit interview (basicallyof the Brokers public record and showsin licensing (or lack of same) or Trust going over any findings), what happensup on the Brokers DRE printout.(Note:Accounting (unlicensed signers, overages, next? Generally, in the case of a Corporation, theshortages, lack of reconciliation, NO Trust D&R is placed against both the BrokersAccount when one is needed, etc.).This Simply put, the waiting begins.You mightpersonal license and the Corporate license.)goes on the Brokers public record, requires a never hear from them again (thats the goodThis letter requires immediate action, aresponse (which definitely should come from news), or six months or a year or even 18complete and thorough explanation ofan attorney), will require a settlement or a months later, you might open the mail andthe steps the Broker has taken to remedyhearing, and most usually ends with fines and receive one of the following: the violations found during the audit,even suspension, restriction or revocation. and generally should be answered by anOnce a Broker is served with an accusation, Corrective Action Letter (CAL).This is aattorney for the Broker.A follow-up auditthere is no time to waste.An attorney letter from the auditors supervisor or theis generally assured once a D&R has beenshould be retained and a dialogue should be Special Investigator who was assigned toissued, and, by all means, everything foundestablished immediately with the DREs legal your case.The letter details the findingsin the first audit needs to be completelysection.Working through an accusation from the audit and asks for a writtencured! can take months or even years.Monetary response from the Broker acknowledgingpenalties can range from the low thousands that he/she understands the findings andCite and Fine.When the DRE findsto six figures.Additionally, unless there is a will take the appropriate actions to ensuremultiple minor violations, but decidesrevocation, the Broker will be subject to at that the violations do not continue.It is athat there is not enough to warrant anleast one follow-up chargeable audit.If the good idea to list the actual policies andaccusation, they have the option of citingviolations involved Trust Accounting, both procedures that the Broker has/will employand fining the broker (which is usuallythe original audit and the subsequent audit(s) going forward.This CAL does not go on$2500).This does not go on the brokerswill be chargeable.a Brokers public record, but does go intopublic record, but will definitely trigger a the Brokers permanent file with the DREsubsequent audit to make sure the brokerPam Strickland is a compliance consultant so that any future auditors/investigatorshas corrected the violations. who helps DRE brokers prepare for and will have a copy.There is no fine or penaltysurvive DRE audits and office surveys.She attached to a CAL. can be reached at pam@pamstrickland.com. Points of InterestWinter 2020/2021Page 25'