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How to Reduce Mortgage QC Costs by 50%: A Case Study

Inflation is affecting everyone, and the mortgage industry isn’t an exception. Mortgage rates have gone through the roof and are still climbing. In fact, this is the highest mortgage rates have been in over a decade, and Fannie Mae just recently cut its mortgage origination forecast for 2022 from $3 trillion to $2.8 trillion and its projection for 2023 from $2.7 trillion to $2.4 trillion. This suggests that today’s low production volumes will remain a challenge, negatively impacting mortgage lenders’ bottom lines. Lenders are going to have to think outside the box to cut costs and overcome the challenges that come with falling mortgage applications all while navigating a time of heightened regulatory scrutiny.

Should You Conduct Mortgage Quality Control Audits In-House?

Have you considered how much conducting mortgage quality control audits in-house costs? What about the kind of skill set your staff needs to efficiently complete them? While it may seem like a good idea initially, in-house QC audits often cost significantly more than outsourcing. Here are a few key points to keep in mind when making your decision:

  • Experienced personnel: Auditors must have a deep understanding of agency and investor guidelines, as well as federal and state regulations. Mortgage QC experts with at least 7-10 years of underwriting experience are the best people for the job.
  • Staff bandwidth: Staff must have the bandwidth to keep up with ever-changing agency and investor requirements and adhere to strict mortgage QC turn times.
  • Fluctuations in volume: When volumes are high, you need more employees to complete the work, but when volumes are low, you could wind up overspending on overhead costs.
  • QC software: In order to achieve a successful mortgage QC process, you need advanced software that your internal team can use to not only perform the audits, but view and sort findings, analyze those findings to track trends, create board-level and agency required reporting, and share information.

All of these factors come at a price. From employee labor to turnover to equipment, the infrastructure as well as soft costs of conducting QC audits in-house can add up quickly.

How Does Outsourcing Mortgage Quality Control Cut Costs?

When you outsource mortgage QC, you move from a fixed cost model to a variable cost model, so you won’t overspend when volumes are low and can still meet demand when volumes are high. This means that you won’t need to resort to reducing payroll by 14% like some mortgage lenders have had to do during low volume periods, according to National Mortgage News.

You’ll only spend money on outsourcing mortgage quality control audits when you need them, while having experts at your disposal that ensure you follow all the latest guidelines.

Mortgage QC Outsourcing Success Story: Academy Mortgage Case Study

Founded in 1988, Academy Mortgage is one of the nation’s largest and most respected independent mortgage lenders. As a direct lender, the organization performs all loan processing, underwriting, closings, and funding at over 200 branch offices located all over the country.

Despite the lender’s success, handling mortgage quality control in-house meant Academy Mortgage was subject to overspending through:

  • Paying the cost of one full-time, in-house auditor
  • Spending resources on one part- or full-time support staff member
  • Training auditors and keeping up with updates from Fannie Mae, Freddie Mac, FHA, VA, HUD, and the CFPB
  • Employing a manager to provide supervision/oversight

Once they outsourced their mortgage quality control audits to MetaSource, the process became simplified, and Academy Mortgage saw impressive cost savings. By outsourcing mortgage compliance audits to MetaSource, Academy Mortgage saves 50% on QC every year.

Finding the Right Mortgage QC Outsourcing Service

With the right mortgage compliance services partner, you can join Academy Mortgage in saving money, fulfilling requirements, and better responding to market volatility – on both a post-close and pre-fund basis.

The best partner will have a trusted team of seasoned mortgage QC experts along with reliable reporting software that enables you to do everything from analyze trends to share information with colleagues. The ideal software solution will even integrate with your loan origination system, so you can avoid spending hours pulling documents to submit for audit. The file delivery process will take just a few clicks and the entire quality control process will be expedited because of it.

How to Get Started Today

With over 30 years of experience, MetaSource is a leader in digital transformation and compliance solutions, bringing the right mix of technology, expertise, and services that will help you achieve your business goals. We assist Academy Mortgage in meeting mortgage QC guidelines, simplifying processes, and reducing costs – and we can help you do the same. If interested in learning more, please contact us today or download the Academy Mortgage case study.

Mortgage QC Case Study

Learn how Academy Mortgage reduced QC costs by 50%!