There has recently been some ambiguity regarding the timing of mortgage quality control (QC) that needs to be part of any mortgage originator’s mortgage QC plan with FHA and Fannie Mae.
FHA QC Timing Response
Previous to the implementation of the new FHA 4000.1 Handbook, FHA’s QC timing requirement was to have your initial audit completed in 90 days from the end of the month in which the loan was closed. With the new 4000.1 Handbook, FHA has shortened that time frame to 60 days. Many people do not realize this change has occurred. This new FHA rule is 30 days sooner than what Fannie Mae and Freddie Mac currently require. Many lenders are still following the Fannie timelines, which would make their QC out of compliance with FHA’s new timing rules.
We reached out to FHA directly for comment and confirmation and we received a written response. FHA stated that all lenders approved by FHA need to have their QC audits files selected, audit completed and rebuttals completed within 60 days from the end of the month in which the loan was originated.
We have also heard several rumors that Fannie Mae may be changing to this timing next year as well.
Mortgage QC Timing Comparison
| Agency | Selection of Files | Initial Report (Rebuttals Completed) | Final Report to Management | Management Response | Total Time to Complete Initial Report |
|---|---|---|---|---|---|
| Fannie Mae | 30 Days from End of Month Originated | 60 Days | 30 Days | Not Specified | 90 Days |
| FHA | 0 Days | 60 Days (includes selection of audits) | 30 Days | 60 Days | 60 Days |
References
- FNMA Seller Guide D1-3-01; D1-3-06
- FHA Handbook V.A.3.B, V.A.2.iii.A, V.A.2.iii.B, V.A.1.d.i
Contact us to learn more about mortgage QC timing, QC plans and post-close QC audits