Duty: Do you mean legal duty or ethical duty?

The question you ask is a good one. A loan originator choosing to do research on the legitimacy and licensing/bonding of a credit repair company he/she is recommending to his/her clients would seem to be a very prudent choice.

Loan originators who owe fiduciary duties to their clients would have a high duty to disclose any conflicts of interest, including if, for example, a loan originator receives compensation of any kind from sending a client to a particular credit repair firm.

Not all loan originators owe fiduciary duties to their clients. It depends on state licensing laws.

Here are examples of things we have in place:

o Succeed with Integrity—Although we are committed to succeeding in the mortgage and insurance industry, we do so only within the bounds of ethics and with the highest professional ideals. We are committed to building a solid business foundation by being open and honest with our customers and our employees.

o Build Community—As part of the financial services business, ______ knows how important community is. We are committed to improving the community in which we work through service, sponsorship, and the personal citizenship of all our employees. Further, we feel that _________ itself is a community. We are committed to creating customers for life, no matter what it takes.

o Universal Respect—Whether a customer or an employee, _________ believes that everyone deserves respect. We are committed to making sure all of our customers receive the best service possible and our employees enjoy where they work.

o Care for Employees–_____________ is committed to creating an environment where all employees can feel professionally fulfilled; all employees demonstrate mutual respect, courtesy and concern for each other; and all employees are encouraged and permitted to afford time and attention to their families and other personal priorities.

Good ethics need to start from the top and be required to be adhered to by their employees by example and education.

The code of ethics should be in the mission statement for each and every company.

You bring up a very valid point. Just because a person works for a company with a code of ethics does not mean that the code is enforced.

After Sarbanes Oxley passed, many companies were required to have a code of ethics and mandated that every employee sign something that said they had read it and will abide by it.

A code of ethics without enforcement is meaningless.

Many people say that they believe in ethics, but it is a person’s actions and not their words that matter.

With that said, with so many of the other vistors saying the same thing, how is a consumer to know who is ethical and who is not?

The Bar Association has a pretty good system for figuring this out for attorneys. The American Medical Association has a good system as well.

A system like this is lacking for loan originators.

This is one of the things our association is working on: Providing an ethical framework for its members and for consumers.

Thanks for stopping by NAMF.

Non compliance with the code makes a LO subject to termination. Wouldn’t it be great to see all brokers & mortgage banks address this upfront and make it a condition of employment. It eliminates the question of what is acceptable and defines the rules before the game is played.

In all commission based earning activities (sales, loan origination, etc.) there are opportunities for the individual to enhance their earnings by engaging in unethical practices…either at the expense of the client or fellow workers. The problem is further exacerbated by employer’s expectations of performance levels by LOs, brokers and salespeople.

The use of Codes of Ethical conduct by offices and associations is valuable in that it provides the uninitiated with a guide to what is acceptable ethical conduct. Without enforcement, the assoications’ codes themselves are no guarantee of ethical behavior. It is only through the individual’s commitment to personal integrity and honor that etihical behavior is achieved.

I think banks should shorten the length of their code of ethics and focus on perhaps 5-7 points and make them concise. The industry is being transformed for the better, but until their is self-regulation, increased licensing and education, it won’t be meaningful. Our company does have a code of ethics in the employee manual.