Pre Funding Mortgage Audit Checklist

Lenders can accelerate their mortgage QC processes by including targeted file reviews in their pre funding QC plans. Targeted or component file reviews enable lenders to screen in depth a smaller pool of loans in order to identify trends or issues more quickly.

TENA’s TWS platform gives clients the power to manage their QC review process efficiently, assign audit findings, create action plans and monitor them as well as track any necessary tasks or follow up plans.

1. Document Review
Document review can be an extremely time-consuming task that requires both knowledge and time, making it challenging to perform efficiently without the assistance of tools to streamline this task. Document reviews often involve teams working collaboratively alongside an eDiscovery tool capable of searching and tagging documents.

A lender’s quality control plan must include requirements for full reviews of loan data and documents prior to funding. As an alternative, component reviews focusing on specific elements such as income verification or asset verification could be conducted instead.

To ensure that review teams can access all relevant information, it is vital to create an organized protocol. This enables reviewers to easily grasp their purpose and scope, while simultaneously eliminating unnecessary data collection.

2. Data Review
An effective mortgage QC process relies heavily on reviewing loan data. Investigating defect trends can help minimize repurchase risks by identifying issues during origination before they reach an investor.

Targeted or component reviews offer another means for improving business practices and are focused on risk elements like underwriting guidelines, documentation requirements, new hires, third-party originators or processes. They allow for greater rigor without going through an exhaustive full file review process.

Outsourcing your pre-funding QC audits to a specialist will allow you to ensure the necessary checks are in place and all required QC steps completed to satisfy Fannie Mae requirements. TENA provides this highly valued service and can tailor its program specifically to meet the needs of your business.

3. DU Review
Buyer agents can avoid buyer frustration and late loan contingency issues that lead to missed COE dates and costly extension fees by insisting that lenders conduct loan DUs for ALL your buyers prior to writing them, so the MLO can identify any credit, asset, or employment issues up front and ensure all requirements have been fulfilled prior to accepting an offer.

DU provides lenders with a simple yet efficient means of validating income or assets, and does not necessitate performing a full re-underwrite when these services are complete. However, they should still investigate and document any inconsistencies found as part of this validation process; furthermore they must monitor trended credit data in DU to identify discrepancies when possible and take appropriate actions against any discrepancies discovered during validation services.

4. Document Re-verification
Document verification is a critical component of mortgage pre-funding quality control (QC). This involves reviewing all documents in a loan file to ensure it complies with internal or investor policies – this may include regulatory disclosures; credit; property; legal; income; asset documentations etc.

Lenders must incorporate pre-funding QC reviews as part of their written QC plan to maintain consistent data analysis, reduce fraud, and mitigate loan defect repurchase risks. A streamlined pre-funding QC process also enables lenders to screen larger batches more thoroughly while improving productivity and efficiency by using an automated platform like TENA’s TWS which automates many tasks associated with pre-funding QC reviews.

5. Reporting
Pre Funding Mortgage Audit Checklist | Loan Audit. DU Data. The pre funding mortgage audit checklist serves as a critical step in helping prevent fraud by reviewing all aspects of a loan file and not leaving anything out for review. Among others, it covers documentation related to income and assets of borrower as well as any DU data provided to lender by borrower.

Fannie Mae and other investors require lenders to conduct prefunding QC reviews as part of their quality control plans. Lenders must select loans at higher risk for errors or fraud – such as those with unique underwriting guidelines, complex income calculations or loans originated by new staff members, originatorss or processors.

Targeted prefunding quality control (QC) allows loan files to be reviewed more thoroughly, increasing efficiencies. Communication and reporting plans must also be in place.