Introducing Hybrid Quality Control
The two tasks facing Quality Control mangers that can be troubling and difficult to complete are the sampling and selection of loan files and the written report that must be provided to management.
The MarBecca Group, through their hybrid program takes over the responsibility of completing these difficult tasks and provides lenders with an effective but efficient sample population. This includes any random, discretionary and targeted samples.
Once the sample population has been identified, we offer two options for actually conducting the file reviews.
You can conduct the reviews, including obtaining all the reverifications.
You can forward the files to us and our team of experienced underwriters will conduct the review while your staff completes the re-verification process.
Once the reviews are complete, your staff will forward the findings to the appropriate staff members for evaluation of the accuracy of the findings as well as provide them with the opportunity to “cure” the problems. Once the review is final, you simple download it to our experts to write the final report.
Because we are trained in statistical analytics and have experience in developing effective reports, we can provide you with a report that will get management’s attention. In addition, through the use of the QC industry benchmark we can provide comprehensive analysis that can answer the question “How do we compare to everyone else?”
Cancelled, Denied and Early Payment Default reviews
Although agency requirements include reviews of these loans, the MarBecca Group can turn these reviews into an in-depth analysis of your operations. Through the experience we bring to the review process as well our expertise in analyzing data, we can incorporate the findings from these reviews into the regular production results and give you indications of where there may be a Fair Lending issue or where you have opportunities to expand your closed loan volume.
When analyzing EPD loans it is an important part of the process to identify the underlying cause of the default to determine the risk associated with loans with similar attributes and defects. This will allow you to enhance your reserve calculation methodologies as well as alert underwriters and loan officers to potential problems.
Unfortunately there are times when investors are dissatisfied with particular loans that you have delivered to them and request that you repurchase them. In other words “lemon loans”. However it is incumbent on the quality control function to analyze the loans as well as the servicing process to determine if there are any defects in the file AND how these defects impact the loans’ performance.
One of the most frustrating issues faced by lenders when repurchase demands are made involves adverse selection. In other words is this repurchase demand based on specific problems within the company or are their numerous loans with this problem. The only way to determine that is through an analysis of industry results and the MarBecca Group has access to the only industry Quality Control database available today. With this knowledge we can provide direction and options on how to handle these requests.
HMDA Data and Fair Lending Reviews
By now we are all aware of the recent Supreme Court decision and the new data fields required by the CFPB for the 2015 filing. However, many lenders may not be aware of the problems recently identified in the reported data or the probability that they will have to “scrub” the data you submit.
In addition to these issues, there are continuing accusations flung about concerning lenders’ Fair Lending programs and practices. During CFPB exams lenders may find themselves questioned and even penalized for findings that exhibit fair lending issues.
The MarBecca Group can address this problem and assist you in ensuring that there are no hidden HMDA or Fair Lending problems in your loan files. Through our relationship with Mortgage TrueView, the leading provider of HMDA analytics, we can provide you with a synopsis of your HMDA results as compared to similar lenders in your footprint. We can also test your file data against the quarterly HMDA LAR and identify data elements or loan level issues that need to be corrected. More importantly we will identify where and why these errors have occurred so that they can be addressed.
Quality Control Department Audits
Investors and agencies now require that every Quality Control department be audited by an independent firm. Having this done by a company who knows the quality control policies and practices from top to bottom is a must.
There are numerous unique issues within a quality control operation and only those who have developed these programs, who have education in quality management and who have been leaders in the field are qualified to conduct such a review.
The experts at the MarBecca Group have this knowledge and experience. We will provide you with a comprehensive analysis of the program in place today as well as identifying opportunities to make the process more efficient, effective and less costly.
Due Diligence Reviews
In order to ensure the quality of loans included in any secondary market transaction it is critical to ensure that the risk associated with the loans is equivalent to what is expected based on the underwriting criteria and the operational risk of the producer. Until recently this focus was on regulatory issues rather than the overall control of the operational process. With the re-emergence of the secondary market and their need to validate the quality of the underwriting, regulatory and closing processes, a new focus must be offered for Due Diligence programs. With Quality³ MarBecca Group provides a due diligence process that focuses on the heart of these issues and provides the analysis necessary to effectively evaluate the quality of the loans.
Improving the profitability of your organization means adding new options and offerings. By having a Fannie Mae/ Freddie Mac seller approvals makes this much easier and gives your organization a chance to grow. Furthermore, if you are considering bringing your servicing in-house, an agency servicer approval is a must. Our expert has over 25 years of experience working for the agencies in these areas and can provide direction and assistance when it is needed most. Find out what it is exactly that you need and how best to position your organization in the best way possible.
There is no doubt that servicing is now elevated to the level of production when it comes to regulatory and operational risk. The CFPB has established standards that must be met through- out your servicing operation and has required that adherence to these standards be reviewed on a monthly basis. In addition there are regular reviews required for any agency approved servicer and most important, it is critical that servicing management have a reliable analysis of these results. Quality³ covers you with the focus on assuring you that the controls you have in place are working to ensure good quality and the insights necessary to identify potential risks.