Seeing A Lot Of Red Lights Here

(After working at a job vetting loan officers for a mortgage broker for a while, it comes to my attention that one of the industry rules that I’ve been enforcing with our subcontractors is incorrect. I thought licensed real estate agents could also originate mortgage loans as long as the loan officer was not also the real estate agent on the deal, which is not true — you cannot be a licensed real estate agent AND originate mortgages, period. A lender calls us out when one of our loan officers does just that, and they cite the federal regulation. I review it, and I learn that my understanding and our enforcement were incorrect. I bring this to the attention of the executives and they say, “We know. Keep doing it the way we’ve been doing it.” I respond in objection, not being comfortable with knowingly going against a federal regulation. The CEO calls me into his office.)

CEO: “[My Name], I understand your hesitation, but this isn’t that big of a deal. The way we’re following this rule is the way they really meant it.”

Me: “But the rule isn’t written that way, and the lender that discovered the issue clearly cares about the rule.”

CEO: “There are a lot of rules out there that aren’t really meant to be followed. Nobody gets hurt by not being too concerned with them.”

Me: “Okay. I have to be honest, though. This rule sounds like it’s in place to protect consumers from fraud.”

CEO: “Let me put it in a hypothetical. Let’s say you’re driving your car out in the middle of nowhere in the middle of the night and you know there are no cars for miles. You come to a red stop light on this dead road. You sit there for a couple of minutes, there are no other cars for miles, and you know it will take at least two or three more minutes for the light to turn green for you. What would you do?”

Me: *through my teeth* “I’d probably run the light.”

CEO: “Yeah, you’d run the light. We all would. There are rules in place, and they’re good rules sometimes, but other times they are unnecessary. And that’s all we’re doing. We’re running a light on an empty road in the middle of the night. It’s not hurting anyone.”

(I submitted my resignation within 24 hours.)