Stay Compliant: Get started with your quality control file audits
- Post-Closing
- Pre-Closing
- Cancelled/Denied Files
- Early Payment Defaults
- Fraud Detection
- Due Diligence
- State Specific Compliance
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 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 D1-1-04, 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
- 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 D1-1-04, Freddie Mac Guide 48.4)
Why should I use MCA?
- 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. - Experienced auditors.
Our auditors each have at least 20 years of mortgage experience, so you can be assured to receive accurate and helpful reports. - 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. - Fast results.
Because of our experienced auditors and efficient workflow software, we can get your audit completed and returned in approximately 30 days.
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 30 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 docs, 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 do I get started?
To request more information, a price list, or to get started, click an icon under “Contact Us” and submit your information, or call 877-250-5243.
