The dynamic nature of the industry and the rising expectations of customers have made it mandatory for lenders to prioritize mortgage quality assurance to improve the process. Lenders can enhance customer experience by investing in their underwriting, pre-funding quality assurance, and post-closing processes. We can see that there are a lot of different options for people who’ve chosen this industry for their business to be in.
They have to ensure not just an error-free but also a smooth and efficient end-to-end loan process by fine-tuning it and fostering unhindered information flow. All FHA approved lenders must have and implement a quality control plan for the origination and servicing of insured mortgages. Only by doing it in a proper way every lender can expect proper results from their work. Therefore, the focus needs to be on the highest possible point while working on a process such as this one.
Now, we will provide you with an insight into the best practices for a mortgage quality assurance and quality control plan that would help lenders mitigate loan file errors and ensure regulatory compliance for a quality mortgage experience for all stakeholders.
We are absolutely sure that you will find the use of all of these different things we are about to place in front of you. You should be aware that this is a pretty touchy thing that doesn’t leave so much space for interpreting and disruption of the process itself. Therefore, everyone should be careful about what they are doing.
Have the Plan in Writing?
The lender must have the quality assurance/control plan in writing by taking into account the size and structure of the organization, the experience of the staff, geographic areas of operation, volume and type of mortgages originated, and other details. All of these elements are crucial for you to have a proper mortgage quality assurance plan.
Therefore, you need to pay extra attention to these to be at the highest possible level. Since we are talking about a pretty sensitive thing that can lead the whole plan to a disaster, you need to make sure that all of these have your attention before you have problems with your hands. This is not a pleasant thing to experience since we are talking about strictly legal things that don’t leave too much space for mistakes.
The quality function should be autonomous of the originating and servicing functions of the lender. It should contain standard operating procedures for the employees involved in or affected by the quality control process. Since we are talking about standard procedures, we mean that they haven’t been changed for a lot of time.
So, the only thing you need to focus on is to make perform them as best as it is possible and without too many mistakes. Thankfully, you can see a plethora of descriptions of this process online. However, don’t make the mistake and not talk with your legal advisor.
The mortgage quality assurance plan must provide for assessing and nursing the overall mortgage quality production on a regular and timely basis. Reviews should usually be within 90 days from the end of the month a loan is closed. In case this deadline is not meet, the whole plan is considered invaluable.
Hence, you need to give your best effort in order to meet all the regulations. Also, these are pretty useful since they will provide the person who needs them with a complete picture of the addressed situation.
Most of the time loan’s sample size that requires your attention, in terms of reviewing, is 10% of the complete procedure. Sometimes, it can happen that this is just not enough. Therefore, we were in situations where sampling provides roughly 2% of lender precision and a 95% confidence level.
The result is usually around 3,5k FHA loans on an annual level, which is not bad at all, right? This is a part of the procedure that will sometimes provide you with an opportunity to influence it with your actions. However, most of the time, you will not have that opportunity. Therefore, you need to be extra careful.
The loans to be reviewed should include all loans from branch offices, PHA loan programs, and also the work from loan processor, loan officer, underwriters, and others. Early Payment Defaults (EPD) must also be included, along with at least 10% of the rejected loan applications and compliance issues.
The quality control reviewers should also look into the work originated by any new branch office, employee, or third-party originator.
For crafting a future-ready quality control plan, the Lender must arrange for a detailed review of the lending documentation and procedures. Having a fool-proof mortgage quality assurance and excellent control plan is a crucial part of the mortgage process rest you can visit here. According to Expertmortgageassistance, almost every government agencies as well as secondary market lenders, require such programs beforehand purchasing a loan.
The lender must make sure that their quality assurance and control plan provides for the re-verification of identity, credit, and financial information along with compliance with all necessary regulations.
There must be timely and accurate assessments to ensure that the lender meets the specifications of the quality control plan. This would help them make improve their business by cutting down on the mortgage risks and frauds, enabling better decision-making, and elevating the overall experience of all stakeholders.
Protecting the Privacy
By ensuring that all of these processes are carefully done, you will make it impossible for the privacy to be breached. So, the first thing is to think about the essential things for a process like this one and you will absolutely have no hardships during the remaining part of the process. It goes without saying that legal advice is an essential part of every successful mortgage quality assurance plan. If you have experience in this field, then you will have zero chance of making a mistake that can cost you along the way. So, be prepared for all of these situations by protecting privacy.