The Importance of Mortgage Quality Control

 

 

A lack of mortgage quality control (QC) can be a huge drag on productivity, especially during post-closing and compliance audits. The cost of manual processes can be extremely high, with each person dragging down the number of loans they can process each day. Furthermore, unintegrated workflows and incomplete data make it difficult to isolate the root cause of issues. Automation of QC processes can double or triple productivity, and rule-based automation can identify weak links throughout the loan manufacturing process and eliminate manual errors.

 

Mortgage quality control should be a process that begins with the origination of loan applications. A quality review involves the evaluation of data accuracy, loan origination, and documentation. The goal of this process is to identify errors and patterns in the application process, as well as ensure that loan processing does not lag behind normal filing schedules. In addition, the quality control process should take into account daily operations, including loan processing, appraisal, and closing. Once the process is implemented, the mortgage lender will need to notify the client about the review. Read on this helpful article that will guide you the right mortgage quality control services.

 

Another aspect of mortgage quality control is ensuring compliance with laws and regulations. Mortgage lenders and mortgage brokers must adhere to certain standards for mortgage processing and use a quality control plan to monitor the integrity of their processes. Mortgage quality control is an important part of compliance for a mortgage lender and helps management keep track of every process. However, it is not enough to be compliant with the law. In order to prevent mortgage defaults, lenders must follow a set of guidelines.

 

Defective loans are technically unsalable and may require a repurchase or indemnification. The cost of these loans to the borrower can be measured. As a result, the ability to offer the best quality product at lowest cost is equally valuable to mortgage originators as it is to automakers. Unfortunately, mortgage lenders have not been quick to adopt these methods. While statistical theory may be mind-numbing, it is critical for mortgage originators to use QC as a viable tool.

 

Using a third party, such as LoanLogics, to perform monthly reviews of residential mortgage loans, ensures compliance with industry standards. Moreover, the selection of mortgages reflects the entire book of business and is representative of various loan types. These reviews should be completed and reported within 60 days of selection. If the QC cycle is 90 days or more behind, the Credit Union should notify the Agencies. After the QC cycle is complete, the Credit Union should use a third-party QC company, LoanLogics, to perform quality reviews. It is important to note that the third-party QC company will make selections based on guidelines attached to the report. Check out this blog that has more info about the best QC company to work with.

 

To ensure compliance, lenders should implement a thorough quality control plan. They must guard against fraud, negligence, errors, and omissions, and incorporate systems to meet those standards. Furthermore, QC plans should include minimum information to ensure that the lender does not commit fraud. This way, they can avoid penalties and protect their clients. Once implemented, a mortgage QC plan can help improve the workflow of the company. This quality control plan can also help mortgage lenders improve loan quality and minimize the risk of default. To get more enlightened on the topic, check out this related post: https://en.wikipedia.org/wiki/Commercial_mortgage.