What underpinning responsibility does the PLM have regarding policy enforcement?

• A. Let policies drift over time
• B. Policies are optional
• C. Establish, implement, and enforce written policies and procedures governing mortgage activities and compliance
• D. Only enforce policies during audits

Answer: (C)

The main idea here is that the PLM is responsible for policy governance and ensuring mortgage activities are guided by formal, written policies and procedures that are actually put into practice. The PLM not only creates documentation that covers how loans are originated, processed, underwritten, funded, and monitored, but also ensures these policies align with applicable laws, regulations, and the firm’s risk controls. This means communicating the policies to staff, providing training, and setting up controls to monitor adherence.

Enforcement is continuous, not something you do only at audit time. The PLM must oversee ongoing compliance, address any gaps or violations, and update policies as laws and practices change. If policies drift or are treated as optional, or if enforcement happens only during audits, the organization loses a consistent standard and increases regulatory and operational risk.