QUESTION
Our company utilizes a third-party quality control firm to perform post-closing
reviews. We are meeting the requirement
for the quality control review and the vendor management review by performing
the pre-funding and post-closing reviews and reviewing the reviewer or auditing
the auditor. How does this practice fulfill Fannie Mae’s
Quality Control Self-Assessment requirements?
ANSWER
While you are meeting part of Fannie Mae’s mortgage quality control requirements with the review of loan files both pre-funding and
post-closing and performing the vendor management of the third-party vendor,
there are additional steps you must implement to ensure the entire quality
control program meets or exceeds Agency expectations and requirements.
In 2013, Fannie Mae issued guidance for lenders to manage risk and
comply with the Seller/Servicer Guide requirements, by providing the Quality
Control Self-Assessment Worksheet to measure the effectiveness of your quality
control program.
This worksheet contains ten sections and it reviews the requirements for a strong and compliant Quality Control Plan and Program. The
ten sections are: 1) Governance/Authority, 2) Training, 3) Defect Rate, 4)
Pre-Funding, 5) Post-Closing, 6) Appraisals, 7) Reporting, 8) Action Planning,
9) QC Vendor, and 10) Third Party Originations. This is a helpful tool to
review the infrastructure of your internal quality control requirements.
There are many components to a compliant Quality Control Plan. For instance, you must
be diligent with periodic internal audits performed by internal staff or
outsourced to a reputable risk management firm such as ours.
Regarding the completion of the worksheet, your Quality Control Manager
should work with your Compliance Manager and/or your third-party quality
control vendor. An annual self-assessment is in your best interest as policies
and procedures are growing documents and even the smallest change can move you
from being in compliance to being out of compliance.
The Quality Control Self-Assessment Tool can be downloaded here.
Brandy George
Executive Director
LCG Quality Control
Director
Underwriting Compliance
Lenders Compliance Group
