Rob Nunziata: The Challenge of Keeping Remote Mortgage Workers Compliant

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PERSON OF THE WEEK: Although many workers have returned to the office since the pandemic began in early 2020, the trend of remote work appears to be here to stay. Prior to the pandemic, only 6% of full time employees worked from home – but that figure is expected to rise to 25% by the end of this year.

Many mortgage lenders and servicers have now adopted remote work policies – many of them “hybrid” plans that allow employees to work from home 2-3 days per week. This has, for obvious reasons, raised a slew of security and compliance concerns – especially for employees who process loan applications or service loans, as well as other positions where sensitive personal information must be shared.

In some cases, lenders and servicers must inspect the home office or work area where the employee will be working remotely, to ensure proper safeguards are in place to prevent sensitive data from being accidentally (or intentionally) shared. Not only is this a tedious and time-consuming activity, its also quite costly.

To learn more, MortgageOrb recently interviewed Rob Nunziata, co-founder and CEO of ActiveComply, a provider of cloud-based solutions that help companies in highly regulated industries stay compliant. The firm recently launched Remote Office Inspection, a new digital service that utilizes encrypted technology to help companies document compliance with agency guidelines and state and federal laws when using remote employees.

Q: Why do mortgage firms need to inspect work-from-home settings? 

Nunziata: There are three primary reasons why mortgage lenders should be concerned about their employees working remotely from home. The first is that many states have been enacting new requirements for companies that use remote workers ever since the great work-from-home migration that took place during the pandemic. The second reason is that lenders need to stay in compliance with agency and regulatory requirements involving consumer privacy, which is inherently more difficult when people are working from home instead of the office. Lastly, companies need to ensure safe workplace conditions exist wherever their employees are working, whether that’s in a remote branch office or in their homes. To stay compliant on all these requirements, companies must conduct inspections.  

Q: Doesn’t it become prohibitively expensive to go out and conduct ongoing inspections of employees’ home offices?  

Nunziata: Obviously, it can be incredibly costly and time-consuming to constantly monitor every workspace in person. The more remote employees a company has, and the more spread out they are, the greater the time, effort and money involved. Even if a company can do it, there’s no way to guarantee compliance on a day-to-day basis. Someone’s home office arrangement could be compliant one day but be out of compliance the next, because they changed locations or because they’re using different equipment. 

Q: Is performing remote inspections cumbersome?

Nunziata: Not at all if one has the right tools. With our firm’s remote office inspection software, a lender’s human resource officer or compliance officer sends a link out to all remote employees. After an employee clicks on the link, they are guided through a simple process that starts with a survey about their workplace. Then, a QR code is displayed where the virtual inspection is activated and the employee is guided through a verified photo and video process as well as a geolocation assessment.

Q: Do home lenders need to be concerned with internet connections?  

Nunziata: Absolutely. All communications that take place within mortgage organizations require secure connections as well as constantly updated security patches for their networks in order to keep private consumer information protected. In fact, many states actually require lenders to use virtual private networks (VPNs) when working with borrower data. In addition, certain mortgage functions require fast internet speeds that might be more than what an employee’s interest service provider can deliver. 

Our technology ensures that all employees, even those working remotely, are using hardware provided by their company and not their personal devices. It verifies the employee’s location at all times based on the employee’s IP address and their smartphone’s GPS location, and it also verifies the employee has sufficient wi-fi speed to perform their work.

Q: Do employers use the remote inspections for other reasons? 

Nunziata: One of our lender clients was able to use it to verify that employees who had requested to work remotely actually had a designated area in their home that was free from distractions. It also ensures that a lender’s employees have safe working conditions in their homes. Believe it not, there have been cases of remote workers who filed workers comp claims because they were injured working in their own home, although I haven’t heard of that happening in our industry. 

We also find that our software can save time and money for annual branch inspections and recertifications. It is quick and easy to deploy the remote office inspection to someone at the branch location for completion. This method allows companies to satisfy agency and regulatory requirements without spending money on the transportation and lodging that is required to physically send a staff member to inspect the office. 

Q: Can you recall a customer who had unexpected benefits from the inspection technology? 

Nunziata: Recently, one of our clients noticed that some of its employees were working very odd hours in the middle of the night. The geolocation feature in Remote Office Inspection revealed that the employees were actually working from Europe, and they had no idea. We’ve had other clients use our technology to discover their employees were working from public places, which can place a borrower’s personal identifiable information (PII) at risk. 

Obviously, this capability is very valuable for companies in highly regulated industries that must meet very specific requirements about where their employees can and cannot work. The problem is this type of technology can be very expensive for the vast majority of small and mid-sized lenders to build themselves, so we built it for them.

Q: How does an employer know if the employee is actually working from the location they say they are at?

Nunziata: There are only two ways to know for sure – actually being there, which is often impractical, or using remote inspection technology. Fortunately, modern technology allows companies to verify an employee’s location at all times through a combination of video software and geo-tracking technology on the employee’s phone. With remote office inspections, companies can get both capabilities and many other features on the same platform.

The bottom line is that remote work in our industry will likely continue to grow, but remote inspection technology is growing as well. With the entire mortgage industry currently focused on reducing costs and avoiding unnecessary risk, I expect more companies will be leaning on these tools to monitor their staff and workplaces for compliance with greater efficiency.

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