Stay Compliant: Get started with your mortgage quality control file audits
- Post-Closing
- Pre-Closing
- Cancelled/Denied Files
- Early Payment Defaults
- Fraud Detection
- Due Diligence
- State Specific Compliance
Ask questions about our audits or about agency guidelines, or get started with your QC audits: Click an icon under “Contact Us” to the right.
What am I required to audit?
Many investors and agencies require quality control file audits, to reduce risk and errors. To comply with the FHA, Fannie Mae, and Freddie Mac quality control plan guidelines, the general rules are to:
- Audit 10% of your closed and cancelled/denied loan files
- Complete the audit within 90 days of closing
- Audit 100% of EPD loan files (FHA)
FHA also requires, as part of the overall QC auditing, that a field appraisal review be completed on 10% of the audited closed loans (or 1% of a company’s closed FHA loans).
(See HUD Handbook 4060.1 chapter 7, Fannie Mae Single Family Selling Guide D1-3-02, Freddie Mac Single-Family Seller/Servicer Guide 48.4)
How often should I perform quality control audits?
- FHA guidelines:
- Audit monthly, if closing more than 15 loans per month
- Audit quarterly, if closing 15 or fewer loans per month
- Fannie Mae guidelines:
- Audit monthly
- *Note: “Lenders must notify Fannie Mae if their QC cycle is in arrears more than one 30–day cycle.”
- Freddie Mac guidelines:
- No specified time – every loan must have chance of selection for audit within 90 days of Note Date
(See HUD 4060.1 7-6B, Fannie Mae Guide D1-3-02, Freddie Mac Guide 48.4)
Why should I use Mortgage Compliance Advisors?
- Cost savings
Rather than paying to set up and train a quality control department, many lenders find outsourcing to be more cost effective. Furthermore, our prices are lower than or comparative to most of our competitors. The cost is calculated on a per file basis; we charge no set up charges, cancellation fees, or monthly fees.
- Fast results
Because of our experienced auditors and efficient workflow software, we can get your audit completed and returned in approximately 30 days. In fact, this month’s average is 20 business days. A fast turnaround time is especially helpful since Fannie Mae is now requiring lenders to notify Fannie Mae if their QC cycle is in arrears more than one 30-day cycle. (Guide D1-3-02)
- Helpful, flexible reports
Our auditors each have at least 20 years of mortgage experience, so you can be assured to receive accurate and helpful reports. Our reports can also be tailored to show specific information you need, such as branch or underwriter performance.
- Easy process
Instead of dealing with the hassle and cost of shipping paper files, simply drag and drop your electronic files to our secured server, and we can start the audit process that same day.
- Responsive customer service
When you call us, you will talk to high level management to answer your questions or discuss any findings on your report. We also return emails quickly and are happy to answer compliance-related questions.
How the audit process works
- Selecting the files
After you sign up with us, you will send us a list of your closed loans for the month or quarter (depending on volume), and we will randomly select 10% of those loans for the audit. We will then email you the list of selected files.
- Drag and drop files to our secured server
We will send you a username and password to our secured server. Once you receive the list of selected files for the audit, all you need to do is drag and drop the files (PDF or TIF) from your computer to our secured server, and your part is done.
- Files are prepared for audit
We then upload the files into our proprietary workflow software, which enables us to move every file quickly and efficiently through the audit process. This helps us maintain our 15 day turnaround from the day we receive your files. Before the audit begins, we prepare everything according to various agency guidelines, such as re-verifying income and employment, ordering a new credit report, etc.
- Auditor reviews the file
Once the files are prepared, an auditor thoroughly reviews each file and makes notes of significant and insignificant findings according to agency guidelines. Our audit checklists are designed to comply with Fannie Mae, Freddie Mac, HUD, and VA guidelines. Essentially, we audit the entire file, from initial application through the closing documents, including a complete review of all compliance documents (ECOA, RESPA, etc.) Because each of our auditors has at least 20 years of mortgage experience, you can be sure to receive accurate and useful management reports from the audits.
- We send you a management report
When the audit is complete, we send you a management report that includes an executive summary, as well as detailed findings for each loan. If items are found out of compliance, your management should take the necessary actions to correct any issues. When FHA and other agencies conduct an audit, they want to see in writing what actions you have taken to stay in compliance.
How long does the audit take before I get the management report?
Our file audit service is fast and accurate. We send management reports back to our clients within 30 days of receiving the files to audit, and this month’s average is actually 20 business days.
How do I get started?
To request more information, a price list, or to get started, click an icon under “Contact Us” at the top right of the page, or call 877-250-5243. info@mortgagecomplianceadvisors.com
