According to FHA guidelines, before a lender can become FHA approved,
they must submit a quality control plan. As stated in chapter 7 of the HUD
4060.1 handbook, a lender “must review [audit] 10% of the FHA loans it
originates,” as part of its quality control plan. These mortgage audits can
either be performed internally or by a third party provider. If done
internally, the lender must establish and properly train a unit dedicated to
quality control. FHA guidelines go on to explain that the staff must not be
involved in loan production.
Third party providers can also perform these mortgage file audits, and
even provide quality control plans that meet FHA guidelines. For example,
Mortgage Compliance Advisors, LLC, can provide a quality control plan and
perform the required quality control file audits for an FHA approved lender.
When the file audits for a certain period are complete, the audit findings
are compiled in a management report and sent to the lender. Third party
providers do not report to HUD/FHA. Instead, it is the responsibility of
management to review the findings and make any necessary changes to prevent
similar findings in the future. When FHA conducts an audit, they want to see
in writing what actions have been taken by the lender to stay in compliance
with FHA guidelines.
For more information on quality control file audits or FHA guidelines,
visit
www.MortgageComplianceAdvisors.com or call 877-226-3217.
(To view all HUD mortgagee letters, visit
www.hud.gov/offices/adm/hudclips/letters/mortgagee/index.cfm
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.
Contact: Sarah Adams – Director of Marketing Mortgage Compliance
Advisors, LLC
.
