You may be interested in reading my magazine article:

It is published in the National Mortgage Professional Magazine,

In this article, published this month, I provide a brief outline of two key areas where credit risk review and risk management conjoin directly to impact a financial institution's capability to conduct business and manage a thicket of regulations. Drawing on my own experience in working with our clients, I offer an overview of what risk management entails, whether conducted internally or through external resources.

As we commence the New Year, given all the regulatory compliance requirements that must be implemented, it is more important than ever to institute reliable risk management practices with respect to controlling and monitoring credit risk.

On behalf of the Directors, Compliance Consultants, and Staff of Lenders Compliance Group, I would like to wish you a safe, healthy, and prosperous New Year!

We begin 2012 with the certain knowledge that many new regulations and responsibilities have made significant and costly demands on lenders, servicers, mortgage brokers, banks, investors, and mortgage securitizers to revise and strengthen plans to assure their economic survival.

Many compliance departments throughout the country have set forth robust compliance calendars in order to monitor, test for, and implement federal and state guidelines.

The primary source of revenue for the aforementioned companies (collectively, financial institutions) is the negotiating, extending, administering, and packaging of credit.

Extension of credit and credit risk are really inseparable features of mortgage loan originations - one does not exist without the other.

Risk management (often referred to, generically, as Compliance) should not formally come under the rubric of the so-called "Best Practices" section of corporate governance. In my view, risk management is not an elective, a negotiable issue, a good operating practice, a mere technique consistently providing superior results, a Six Sigma template, or a business management strategy.

Rather, risk management is, and ought to be, an inherent and essential, evaluative and ministerial function reaching to virtually all intrinsic aspects of a financial institution's business model.

This is why I coined the term "Mortgage Risk Management," because it stands on its own, a specialization that provides a firm foundation to the residential mortgage loan flow process - from point of sale to securitization. Put otherwise, it is the one and only "fail-safe" means by which a board of directors may ensure that management effectively implements internal processes designed to identify, measure, monitor, and control credit risk.

Close consideration of appropriate risk management practices is vital to a financial institution's stability, most especially in the outset of a new year and at all other times.

But what is risk management?

And, how does risk management affect a financial institution's way of doing business?