Having performed tens of thousands of mortgage compliance audits through the years, we get asked about the most common problems in the pre-fund, post-close, servicing, and MERS audits we perform.
With 2015 firmly in the books, the jury is in: here are the Top 20 defects for moderate and significant findings that we identified as part of the tens of thousands of mortgage compliance audits we performed last year.
Drum roll, please…
| Defect | Level |
|---|---|
| 1. Initial Disclosures – Timing Violation | Moderate |
| 2. Underwriter Approval/Conditions – Missing or Defective | Moderate |
| 3. GFE – Adjusted Origination Charges | Moderate |
| 4. GFE – Important Dates #2 | Moderate |
| 5. Loan Application – Missing or Defective | Moderate |
| 6. GFE – Timing Violation | Moderate |
| 7. Appraisal Delivery – Timing Violation | Moderate |
| 8. Incorrect Income Calculation | Moderate |
| 9. Servicing Disclosure – Missing or Defective | Moderate |
| 10. GFE – Final HUD Comparison | Moderate |
| Defect | Level |
|---|---|
| 1. Verification of Employment – Missing or Defective | Significant |
| 2. Incorrect Income Calculation | Significant |
| 3. Insufficient Assets to Close | Significant |
| 4. Initial Disclosures – Timing Violation | Significant |
| 5. Note – Missing or Defective | Significant |
| 6. Total Points and Fees – Exceeds Maximum | Significant |
| 7. Minimum Borrower Investment | Significant |
| 8. Servicing Disclosure – Missing or Defective | Significant |
| 9. DU or AUS Findings Report – Missing or Defective | Significant |
| 10. Income Documentation – Insufficient | Significant |
If you have issues with any of the above mortgage compliance defects or findings, or don’t know if you do, let us know. We can even audit your internal auditors to see how they’re doing.