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February 15, 2009 ( PowerHomeBiz ) -
Salt Lake City, UT -
Recently, the Associated Press reported that mortgage rates reached 4.96
percent in mid-January. This is the lowest recorded level since Freddie Mac
began its rate survey in 1971. With interest rates so low, the volume of
residential mortgage loans has steadily increased, particularly in the FHA
arena. So that a certain level of quality is maintained, one of HUD’s
requirements is that institutions originating FHA loans perform an audit on
10% of the loan files that they have either closed or cancelled. These
audits can either be done on a quarterly or monthly basis, depending on
volume. In some circumstances, other agencies and investors are adapting
this same requirement. According to Craig Christensen, President and COO of
Mortgage Compliance Advisors, LLC, “more and more investors are requiring
brokers, correspondents, and others to have a quality control plan in place
that provides for [quality control] audits, before approval or renewal of
contracts.”
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Third party firms, such as Mortgage Compliance Advisors, LLC, can perform
this 10% quality control file audit function, along with other compliance
and quality control functions, for brokers, lenders, banks, and credit
unions. These services help organizations remain compliant with FHA,
investor, and other agency guidelines and maintain high loan quality.
Furthermore, since quality control file audits are required by HUD/FHA, HUD
mortgagees will be prepared for the eventuality of an FHA onsite audit, by
keeping management reports (a summary of the files audits for a certain
period) on file.
Management reports (sometimes referred to as quality control findings
reports) are filled with detailed information that will significantly
improve quality control. For example, when auditors at Mortgage Compliance
Advisors, LLC, perform a file audit, they use a comprehensive audit
checklist to check each page for accuracy and then record their findings.
After the post-closing or cancelled file audit is complete, management
reviews the audit’s findings and summarizes them into a management report
that is accurate and easy to understand. Approximately 30 days after the
files selected for audit have been received, Mortgage Compliance Advisors
sends the report to the client to review. After reviewing the report,
management can take any necessary action to ensure continued loan file
quality and compliance with HUD/FHA or other conventional guidelines.
About Mortgage Compliance Advisors, LLC (MCA):
MCA was founded on the
premise of providing mortgage brokers, retail lenders, wholesale lenders,
and banking institutions of all sizes with a sound alternative for meeting
their mortgage compliance needs. MCA's principals, Bob Warnock and Craig
Christensen, have a combined sixty years of experience in the mortgage
industry. Thirteen years of Bob Warnock's thirty-five year career in the
banking and mortgage industry were spent at the Salt Lake City HUD/FHA
office, first as an underwriting specialist, then branch chief over
underwriting and insuring, and finally as Field Office Chief with
responsibility to oversee lender approval, underwriting, insuring and the
assignment program. Much of Craig Christensen's 25 year career has been in
senior management positions with national retail and wholesale lenders.
For additional information on FHA file audits or questions about FHA
approval, visit
www.MortgageComplianceAdvisors.com .
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