If you perform mortgage file quality control (QC) in-house, we have two questions for you:
- Who's auditing your auditors?
- Would you outsource mortgage QC if you could save 12-20% and decrease non-compliance/buy-back risks?
In-House vs. Mortgage QC Outsourcing Cost Comparison
Based on our experience, one extensively trained auditor with underwriting experience can audit 4 loans a day. If you fund 4,000 mortgages per month and audit just 10% on a post-close basis, you will need 4 auditors plus two support staff to track down trailing documents and perform verifications, one mortgage QC manager, and someone to audit the auditors.
These internal personnel costs, including payroll taxes and benefits, can be 12%-20% higher than external mortgage QC costs.
Of course, even internal mortgage QC personnel costs involving several people are trivial if even a few mortgages need to be repurchased because of improper loan origination. They can be resold again but often with a 10-20% loss per mortgage.