What is mortgage quality control?

The technical aspects of compliance are most important when supporting a consistent and comprehensive mortgage quality program. Whether it’s a mortgage lender who wants to meet the requirements of HUD, FHA, Fannie Mae, Freddie Mac, or the provincial regulator, the principles of control and quality assurance improve or enhance the process. By writing reviews, pre-financing quality assurance, and post-closing quality control, lenders or services can correct the loan process and the information provided to borrowers, help reduce loan errors that can be found during file inspection or verification, and provide data based on compliance settlement methods.

Chapter 7 of the manual HUD 4060.1 presents its requirements for quality control. The book states: “All FHA-approved creditors, including lenders, must implement and continue to establish quality control systems to establish and/or provide bonds as a condition of obtaining and maintaining FHA approval. Managing and lending services can create and maintain a quality assurance system. The quality assurance process must be in writing.

• The quality assurance work should be independent of the original creditor and service provider.
• The audit must take place within 90 days of the month in which the loan is closed.
• Lenders who cover more than 15 loans per month should be reviewed at least monthly.
• The loan should be charged at the level of 10% of the loan, or according to a random calculation formula that provides a 95% confidence level and 2% principal to lenders who have made more than 3,500 FHA loans annually.
• Quality control post-closing test – A loan for review (including limited to loan applications) must include credit from all branches and all credit managers, lenders, writers, etc. FHA loan programs such as 203 (b, 203 (k), HECM etc.). Includes old loan (all loans must be made within six months), rejected loan application (minimum 10%), and terms of service (e.g., RESPA, decent housing, unqualified applicants, HMDA, supervisory fees, MIP). Salaries, advertising, etc.).
• Review of quality control should also take into account the lenders’ use of external promoters.

Fannie Mae demands that the Credit Quality Initiative (LQI) be adhered to. LQI emphasizes quality control in all phases of the process of complying with the guidelines for quality control and mortgage services – mortgage quality assurance services, quality assurance before pre-financing, and quality control after closure. Whether done to meet LQI requirements or other quality requirements, the processes, procedures, and documentation are best examined using a pledge list. Audit of quality control can be performed by third parties or organizational staff; however, the market value of the process is the market relationship with the daily lending or service of the loan.

Mortgage quality assurance and insurance plans can be developed according to a ZERO target for the frequency of weakness and achieve the quality of the ZERO damage. The ZERO default plan will include samples designed according to a ZERO sample plan. ZERO quality damage is an ambitious goal for loan production and services and may not be realistic to achieve it; however, the practice of mortgage quality control and insurance practices of a NULL target for the target rate promotes high quality and provides a detailed assessment of each step of the process.

Essential to quality control and quality assurance processes are ongoing training and industry knowledge, such as those presented at quality assurance conferences, MBA quality assurance forums, and periodic regulatory and quality assurance conferences.

Comprehensive quality control and inspection

Employees review experts and subject matter experts to ensure that you comply with investor policies and requirements and to ensure that your operations are in line with good practice. Quality control and review staff have extensive experience in original operations and services and have extensive knowledge of different types of active residences (including GSE, agency, conventional, FHA, home equity, and vice versa). We offer a wide range of service options that can be used for long-term quality control or monthly quality control records. Or, by combining quality control leadership with existing customer management and processes, we can provide a complete turnkey solution. Given the background of lending resilience, creators and reporters can make mistakes in advance and take corrective action to improve the quality of lending and operations. Our comprehensive QC solutions help ensure data integrity, subscription accuracy, and pre-financing and pre-closing loan documents. In this service we:

• Review of samples of loans that meet regulatory or institutional requirements and reflect the characteristics or circumstances associated with default
• It provides detailed review, validation, recalculation, and revalidation of data recorded in ASTs, such as debt income (DTI), loan value (LTV), income, assets, credit reporting comparison, and more.
• Review important and important transaction information and closing documents to ensure accurate, accurate, and consistent details.
• Provide results and reports within agreed deadlines

Validating data and documents is more important than ever. The scrutiny of Fannie Mae and Freddie Mac is intensifying as the quality control schedule after purchasing a loan becomes faster, reviews become more comprehensive, and the targeted sampling of loans in function of risk attributes develops. Freddie Mac’s Industry Letters on Quality Control and Enforcement Practices and Quality Control Best Practice publications provide the requirements for the design, management, and documentation of effective quality control programs. Recent policy changes to the Fannie Mae Loan Quality Initiative (LQI) and the Fannie Mae Sales Guide have identified additional new requirements regarding the frequency, depth, and timeliness of loan quality reporting.

The Department of Housing and Urban Development (HUD) describes the requirements of its quality control system in Chapter 7 of book 4060.1. This explains: “All FHA-approved lenders, including lenders, must always implement sound management plans to establish and/or manage insurance loans, such as obtaining and maintaining FHA conditions approved by them. “In addition, HUD recently announced a new regulatory framework that will require FHA lenders to provide the agency’s insurance fund with a “risk” compensation based on the billing model and then make a statement through the system. Investment of FHA. Given that a study conducted by FHA at the beginning of the series found that only 19% of loans are considered borrowed, which means they are not mistaken, this is not surprising. Based on these findings, it is high time lenders become accustomed to the value of loans and implement quality management strategies that can reduce the “total risk” of FHA loans.