Primary Residential Mortgage, Inc. (PRMI), Salt Lake City, a non-bank mortgage originator with annual volume of more than $4 billion that ranks itself among the top 10 in its segment of the industry, has created a a new Enterprise Risk Management (ERM) group and promoted H. Burton Embry to run it.
A twenty-five year mortgage-banking industry veteran, Embry, now Senior Vice President – Enterprise Risk Management, will be responsible for overseeing the Compliance, Licensing, Quality Control, Insuring, Final Docs and HMDA Departments. I spoke with him about his plans for the new department.
"There can be no doubt that as a non-bank mortgage originator we have been targeted by the Consumer Financial Protection Bureau as an entity that needs more regulation," Embry said. "By having one leader, one unified voice within our company, we will be better able to respond to regulators, as well as warehouse lenders and investors."
Emby said that the risk management function in mortgage mortgage shops is a system of silos that make sharing information, managing quality control and responding to regulators difficult. By reorganizing, PRMI hopes to position itself to better mitigate risk across the enterprise and through the entire loan origination process.
“Over the last couple years, the mortgage industry has been under intense scrutiny,” said Dave Zitting, President and CEO of PRMI in the company's release. “While the larger banks all have ERM departments, it’s uncommon for a company of our size to have one but we wanted to take aggressive steps to demonstrate to our customers, partners and employees our commitment to providing a safe and compliant mortgage experience.”
Ermy told me he hadn't seen any institution in his peer group, $4-$5 billion in annual orignations, taking this step. PRMI has more than 190 nationwide offices and over 850 Mortgage Loan Originators. The company is licensed in 49 states and the District of Columbia
“In today's mortgage environment, lenders must manage compliance and quality issues more closely than ever before,” Embry said. “By establishing this new group we are implementing a solution that will sharpen our focus on complying with all mortgage banking laws and regulations, improve on our overall loan quality and help us to better manage risk across all areas of our Company.”
In addition to Burton’s promotion, Shelly Hill was promoted to Compliance Director. Hill will be responsible for the day-to-day compliance activities of Primary Residential Mortgage. Previously Hill was PRMI’s State Compliance Manager, a position she’s held since April 2011.
For it's part, the CFPB has not made its plans for regulating the industry clear, although Cordray did way that smaller banks might not be subject to all of the same rules that will be imposed on larger institutions. It is not yet clear where that line will be drawn.
I expect to see all but the nation's smallest banks reorganizing to move risk management functions further up the chain of command, with more power and broader scope in order to ensure compliance across the enterprise. If Cordray manages the CFPB as some suggest he will, even the smallest banks will wish they had the resources to do the same.