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Meeting the Rising Demand for Mortgage QC Resources

Blog: Meeting the Rising Demand for Mortgage QC Resources

In the ever-evolving landscape of mortgage compliance, the need for robust mortgage QC resources has never been more urgent. As mortgage companies strive to navigate a myriad of regulatory requirements while optimizing operational efficiency, the shortage of experienced QC professionals looms large as a significant challenge. And, it isn’t necessarily because those qualified professionals aren’t out there. They are.

Fannie Mae’s Mortgage Lender Sentiment Survey underscores this pressing issue, revealing that “cost-cutting” was the primary focus for lenders in 2022 and 2023. 2024 looks to be more of the same. However, this relentless drive to cut costs has led to a wave of layoffs, particularly within compliance and loan quality review departments, leaving many originators (and servicers, I might add) understaffed in critical risk management functions.

As we all pray to the housing market rain gods to ease pent-up demand and drive volume increases, we should also be aware that a jolt of new volume could shock those organizations that cut back on compliance and QC expertise, creating more risk with potentially costly consequences. Without adequate support, staying abreast of guideline changes, best practices in loan review, and ensuring compliance with new requirements becomes increasingly challenging, leaving mortgage companies vulnerable to fines and penalties.

Against this backdrop, let’s explore what can be done:

Increased Emphasis on Pre-Fund Quality Control:
Let’s check in with the Fannie Mae QC Boot Camp, which called out the need for lenders to prioritize Prefunding QC, as it remains a critical tool for identifying and mitigating risks before loans are closed. Recent updates requiring lenders to have an effective internal evaluation of its own mortgage quality control program (Fannie Mae Calibration) based on the prior month’s total closings underscore the importance of investing sufficient time and resources into pre-fund QC to uphold loan quality standards.

This is where your QC platform becomes a key factor in addressing pre-fund resource constraints. Indecomm’s AuditGenius invested a significant amount of development hours into the pre-fund QA/ Pre-close QC functionality to drive checklist automation, data and document comparison, and auto-populate checklist answers. If you haven’t explored a modern system like AuditGenius that automates these time-consuming aspects of pre-fund, improving accuracy to boot, you are missing out.

In general, modernize or upgrade your QC platform:
It’s crucial to recognize the pivotal role of technology in enhancing QC processes and managing resource constraints.

The truth is that it’s easy to get stuck in a holding pattern with an old and outdated system out of fear of transitioning to a new system. However, with advancements in automation and document intelligence capabilities, your QC software should be more than just a loan review management and workflow system—it should be automating cumbersome tasks and shaving off hours of unnecessary work. A modern QC platform (we like our own,  AuditGenius😊) means more files can be reviewed without adding a significant burden to your team.

Here are a few more features that AuditGenius provides that help lenders increase productivity while ensuring high-quality risk management. Does your QC solution offer these?

  • Pre-fund checklist automation with pre-filled answers
  • Automated data and document comparison
  • Unlimited workflows
  • Quick and easy configuration for targeted reviews
  • Ability to QC the required 10%… but why stop there when your tech will give you the ability to audit far more?
  • Fast, user-friendly, reporting: whether customizable or ready-to-go (whatever you need)
  • Interactive dashboards: drill down into portfolio trends to quickly push defect trends and risk management feedback over to your operations team for continuous improvement

Get Income Calculations Right
One of the main reasons for defects is the ongoing issue of incorrect income calculations. Indecomm customers who use IncomeGenius in the early stages of origination are finding that their loans are far less likely to be subject to a putback. That’s because IncomeGenius accurately and automatically calculates self-employed borrower income, which represents the most cumbersome and time-consuming calculation.

Before even reaching the loan audit process, IncomeGenius has captured the data from unstructured income documents, validated that data, and automated an accurate and reliable calculation. Proactively addressing common defects in the operation can lead to fewer errors and reduced repurchases as a result of incorrect income calculation. Using an accurate income calculation solution like IncomeGenius means your auditing team is starting with higher-quality income analyses. That takes quite a bit of time and pressure off your audit team.

Urgency in Process Upgrades
In a fiercely competitive financial services landscape, upgrading mortgage quality control processes is imperative to enhance efficiency and maintain compliance. Outsourcing mortgage QC to Indecomm with expertise in pre-fund, post-close, servicing audits (and much more) can provide a strategic advantage by ensuring compliance with evolving regulations while optimizing operational efficiency and reducing costs. This takes some of the weight off your QC team.

The most wonderful thing about Indecomm QC services is that we leverage our AuditGenius platform, which is a leader in driving accurate quality reviews, reducing repurchase risk, and enhancing insights across the lifecycle of the loan.

In a competitive mortgage landscape, the urgency to upgrade mortgage quality control processes, people, and technology cannot be overstated. Outsourcing mortgage QC resources to Indecomm offers a strategic advantage, ensuring compliance with evolving regulations while optimizing operational efficiency and reducing costs. Leveraging the expertise of Indecomm’s QC services, powered by the AuditGenius platform, enables lenders to drive accurate quality reviews and mitigate repurchase risks effectively. Take the proactive step towards enhancing your QC processes and mitigating risks in mortgage compliance. Reach out to Indecomm today to explore how our solutions can elevate your quality control efforts and streamline your operations.