A robust quality control program is an imperative element within the mortgage industry. Well-constructed and regularly enacted quality control procedures ensure that high standards are maintained throughout the home loan sector. These accountability measures keep the industry consistent and foster a higher sense of consumer confidence.
Standardized Quality Control Policies and Procedures
The primary step in developing an effective quality control program is the development of a set of written standards and procedures. This document should outline all quality control measures. It should also designate methods for providing oversight to the quality control program as a whole. Specific metrics and exact numbers regarding appropriate sample sizes must also be included, as these will clearly define desired outcomes.
Other important elements to be included regard documentation, corrective actions and analysis. Quality control standards should clearly outline appropriate methods for creating documentation and reporting quality control findings. They should also establish appropriate follow up procedures when corrective actions are needed. The quality control program itself must contain high level methods of analysis that can quickly identify the root causes of any problems or issues.
Well-Defined Quality Control Scope
This documentation of written standards should acknowledge and govern every step within the mortgage lifecycle. Specific items and processes to be covered include:
- Credit analysis
- Pre- and post-closing processing
- Closing processing
- Loan boarding
- Data verification
- Re-verification of loan documentation
- Escrow administration
- Servicing alignment initiatives
- Loans that are in delinquency, bankruptcy or foreclosure
- Collections procedures
- Mitigation of losses
- On-time and in-full payment of mortgage insurance premiums
- Payoff compliance as per servicing guidelines
- Fair lending practices regarding potential unfair or discriminatory acts
- Confirmation of compliance regarding investor and regulatory requirements
- Customer service policies, procedures and best practices
Specific metrics and exact numbers regarding appropriate sample sizes must also be included, as these will clearly define desired outcomes. Sample selection criteria must be clearly stated. All samples must be proportionate to and representative of the entire group being sampled. Samples should be randomly selected so as ensure an accurate view of the entire mortgage grouping.
Another essential aspect of a good quality control program relates to effective standardization of the process. This means that that all verifications must be independently performed at appropriate intervals according to a standardized set of procedures. Parties who perform quality control measures must not be associated with any of the tasks being reviewed in the quality control process. Appropriate intervals for quality control can be on a monthly, quarterly or annual basis depending on the given item being audited. All audits must occur on a regular and consistent basis.
Tailored Quality Control Approaches
An effective quality control program is tailored to an organization’s unique needs and conditions. The initial quality control approach should be custom developed so as to best serve the organization in question. Once this approach is established, the final essential piece of a strong quality control program is an ongoing and relentless pursuit of improvement. Quality control team members must be vigilant in seeking ways of improving processes. This will ensure that the process evolves as needed so as to promote increasing levels of accountability and consumer confidence.