Internal or External Compliance Testing Sample Clauses
The Internal or External Compliance Testing clause establishes the right or obligation for a party to conduct assessments to ensure adherence to relevant laws, regulations, or contractual requirements. This may involve periodic audits, reviews, or inspections performed either by the organization itself (internal) or by independent third parties (external). By enabling such testing, the clause helps identify and address compliance issues proactively, thereby reducing legal and operational risks and ensuring ongoing conformity with applicable standards.
Internal or External Compliance Testing. Nationstar shall conduct transactional testing and compliance/controls testing, either internally or by retaining the services of a third-party firm, to assess Nationstar’s compliance with the Servicing Standards attached as Exhibit A to this Agreement. The testing shall be conducted in the ordinary course of Nationstar’s business consistent with industry standards and Nationstar’s internal testing schedule, which shall be based on an assessment of high-risk areas and emerging trends.
a. All internal testing of compliance with the Servicing Standards will be conducted via three separate “lines of defense.” First, at the business level, business line managers will monitor routine operations to identify potential issues and evaluate operations for risk. Second, the Risk and Compliance department will conduct tests of both random and targeted loan populations. Third, the IAD will conduct risk- based testing.
b. As part of its compliance testing, Nationstar shall conduct monthly tests for loans from all fifty states. Each test will be comprised of a review of an appropriate and representative sample to assess compliance. Testing will include inspection of loan documentation, review of loan servicing system notes or data, and management inquiries/interviews.