Due Diligence and Ongoing Monitoring

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  • 1.  DPA Program (Down Payment Assistant lenders/programs)

    Posted 03-08-2022 08:34 AM
    We have been treating our DPA agency's as a "third party vendor", although down the road on managing this DPA we realize that it is best to not to tag them as "third party vendor" since we utilize their services to provide to our borrowers, which I believe is same in any mortgage industry, I was wondering what is the best practice or industry standards on how to manage DPA (down payment assistant lenders/program) ?

  • 2.  RE: DPA Program (Down Payment Assistant lenders/programs)

    Posted 03-15-2022 04:24 PM

    Hi there,

    I am curious as to why you might not continue to treat your DPA as a third-party vendor in the future? As you are using their services for your borrowers, it seems appropriate that you would manage the risks associated with that relationship. Your engagement with the DPA should include inherent risk assessment, due diligence, appropriate contract structuring, and ongoing monitoring from a third-party risk management standpoint. However, additional risks and complexities regarding DPAs may include additional activities that fall beyond the TPRM scope and land with your regulatory compliance team. If that is the case, it may require additional communication and coordination between TPRM and compliance to ensure all aspects of the relationship are managed appropriately.

    I would love to hear from other members with experience in the DPA/ Mortgage topic.