Profiting From Non-Compliance

Recently I have been hearing stories about mortgage brokers and net branch operators who have implemented strict compliance policies to clean up their shops and hopefully the industry. No one can argue with people who want to remain compliant but I have noticed signs of abuse even when the concept is to stop abuse. For example when a company notices a branch has not been following all the rules, they can either give a warning or they can terminate the branch for violating the law. The question is what happens to the funds the broker or net branch company has already collected on loans that were at issue? Who gets to keep those funds? What if there is a lot of money at stake? Say $50,000, $75,000, or even $100,000. Isn’t it a little too tempting for the net branch company to start looking for violations so they can terminate the branch and keep the loot? Remember that it would take a net branch company like Global or Premier over 7 years to collect $100,000 in net fees from a branch. When you read their contracts you notice they reserve the right to do exactly what I am discussing here and apparently some companies have been exercising this right on a regular basis. Naughty, naughty.

So, here is one more reason why you should read the employment contract with a magnifying glass and refuse to sign it if it contains draconian terms.