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Mortgage lenders need solid and effective quality control system to operate successfully. Having a well-established quality control program allows mortgage lenders to ensure that all aspects of mortgage processing, from application to processing, is executed in a way that meets the standards as mandated by regulatory bodies. A quality control system, in essence, can assist the management to keep track of the many mortgage processes within the company. It also aids in the evaluation of the processes’ integrity by providing appropriate feedback.

In order to implement good quality control practices lenders should bank on established third-party vendors. A reputed partner has well developed processes to check mortgage quality control. The processes are built in keeping with regulatory requirements and with expertise acquired through experience. Below are the activities that a good quality control process takes care of –

Documenting Quality Control Activities

Ideally, the quality control process for mortgages should be documented as its whole, and that documentation should be evaluated routinely by the relevant review teams. Incorporating contemporaneous reporting of events into the documentation system should allow it to record the process’s chronology.

Mortgage quality control vendors will document the following processes:

  • Selecting the Post-Closure Sample

Rather than reviewing every single mortgage application, it is recommended that a sample set of cases be chosen. Reviewing this group of samples allows gauging the overall quality of the organization’s case filing and documentation procedures.

  • Random Sample 

As each case has an equal chance of being examined, a random sample allows for an unbiased picture of all mortgage applications. 

  • Targeted Samples

These are samples that are chosen based on their due dates in order to determine whether or not there is any fraud or information deficit of any kind.

  • Discretionary Samples

Each of these samples is chosen at random from a certain group of cases. They provide access to information about these specific processes and assist in identifying patterns. 

  • Document Review 

Documenting mortgage quality control reports require a review process that keeps track of all mortgage files. This means that any anomalies or variations from policy detected in the mortgage file that could affect eligibility must be notified and properly justified.

  • File Documentation Review 

Compliance with industry standards and guidelines requires the submission of complete and accurate documents. There must be thorough records of the process for files that are being reviewed prior to or after closing.

  • Re-verification

A key QC requirement is to verify and cross-check data presented with mortgage applications, such as title searches and sales contracts. When papers containing borrower information are transmitted, suitable security measures must be implemented to prevent unintentional disclosure.

  • Document Retention

Documents should be retained for a period of time following the date of pre-closing or post-closing of the QC review. These include QC results, reports, corrective, and preventative actions.

Pre-Closing Mortgages Quality Reviews

Sample reviews before closing are one of the most important services lenders look for in a mortgage quality control business. Loan origination is monitored and data accuracy is evaluated using pre-closing review processes, which allow lenders to keep an eye on the loan or policy origination process. Additionally, it inhibits the submission of mortgages using data that could be false, erroneous, or insufficient.

  • Sample selection must be done prior to close to ensure timely quality control evaluations and avoid delays in the normal filing routine.
  • There should be a sampling process that takes into account all aspects of the organization’s daily operations. 
  • When evaluating the work of a new branch, employee, or technique, targeted samples must be picked to ensure that the findings are accurate. A targeted evaluation is also recommended if suspicious practices are discovered.
  • Prior to closing, the QC review should identify and remedy mistakes.
  • A record should be kept of the corrective and preventive measures implemented.
  • Validation and re-verification of important procedures should also be part of the quality control process prior to closing. Included in these operations are the following: data entry from source papers; employment verification; asset assessment; appraisal of the property to be mortgaged; insurance policy details; and many more

Post-Closing Mortgage Quality Control Reviews 

An in-depth analysis of the methods used to ensure successful closings will be provided by the mortgage quality control process after mortgages have been completed. In addition, it can describe the practices to be avoided or modified to make the process more effective. Mortgage QC solutions should include, but not be limited to, the following processes:

  • Examining the Source Documents – This helps to check that the data filed with mortgages exists in the public domain and is accurate. He or she will also make sure all loans comply with purchase agreement conditions.
  • Error Discovery – This guarantees that purposeful or unintentional errors in practices are found and corrected with appropriate training programs. Fraudulent information must be detected at every stage of the mortgage processing process.
  • Compliance Audit – This is required to check that the company’s mortgages adhere to regulatory requirements and follow guidance practices to the best of their ability.
  • Reviewing Denied Applications – Examining the papers that led to the refusal of any mortgage application might provide insight into the processes that must be rectified to avoid future declines.
  • Data Integrity Review – It is recommended that the completeness and accuracy of the data submitted in the mortgage application be compared to the source documents. Checking the validity of the source document and re-verifying the records are part of a review of data integrity practices. A procedure for examining data integrity-related documents must be developed and diligently followed.

Quality Control Event and Activity Reporting

One of the most critical tasks for any mortgage QC services supplier is reporting. The absence of an event or activity in the records means that the activity was never genuinely conducted, according to quality terminology. It is consequently recommended that reports include scopes for collecting activity performance as well as cross-verification by reviewers. To justify the completion of the task, an effective mortgage QC vendor must ensure adequate review reporting. Mortgage QC review reports must be presented to lenders on a regular basis in order for them to check the overall quality of their operations.

The following are some of the important conditions that the reporting procedure must meet:

  • All pre-closing and post-closing QC evaluations must be included in the report. Before reporting, the activities must be well-documented and carefully examined.
  • The QC findings should be disclosed within a certain time frame to allow enough time for operational modifications to take effect.
  • The mortgage QC services reports are designed to provide important information for management to fully comprehend the significance of the findings.
  • The reports should include all relevant recommendations for corrective steps, as well as an impact assessment study of deviations from the protocols.
  • Mortgage businesses must monitor QC results in order to keep track of practices.

Conclusion

Mortgage Quality Control Services provides solutions for the entire range of events that must be monitored, assessed, and altered to meet the mortgage industry’s regulatory requirements. The highly qualified personnel guarantee that the lender’s needs are met and that regulatory norms are followed. These services assist lenders in carrying out their operations with greater precision and accuracy, resulting in bigger earnings in the competitive mortgage market.

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This blog is brought to you by Expert Mortgage Assistance. We are a specialized provider of back-office support services to mortgage companies and lenders based in the US. Mortgage quality control service is one of the services we specialize in. To know more about our services get in touch with our experts now.