While very little about 2020 was predictable, it was a year in which mortgage quality control issues fell into a familiar pattern. This findings report includes MetaSource’s top 15 findings along with a deep dive into our #1 finding and best practices for avoiding it.
Top QC Findings for 2020
Here is the complete list of our top findings for 2020, including all loan types and both regulatory and agency findings:
- Closing Disclosure – Tolerance Violation
- Closing Disclosure – Calculation Cash to Close
- Closing Disclosure – Defective
- Closing Disclosure Timing Violation
- Other Application/Processing Documentation – Intent to Proceed
- Income not Documented
- Other Application/ Processing Documentation – Loan Estimate – Timing Violation
- Product Parameter Points and Fees
- Insufficient Assets to Close
- Income Documentation – Aged
- DU or AUS Findings Report – Missing or Defective
- Incorrect Income Calculation
- Security Instrument – Missing or Defective
- Closing/Title Documentation – Closing Disclosure- Defective
- Note – Missing or Defective
#1 Finding: A Continuous Trend
Closing disclosure defects remain lodged firmly in the top five of our annual QC findings, where they have put down roots every year since TRID Rules took effect more than five years ago.
Closing disclosure tolerance violations have topped the list consistently in four of the last five years, including 2020. It’s a category that repeatedly trips up lenders but that is often less about failing to adhere to tolerance regulations and more about failing to provide enough information to show a change has been made correctly.
“While this is the number one finding, it is more often than not tied to documentation missing from the file versus the lender actually failing to meet the fee tolerance regulations,” says Shannon Howard, MetaSource manager of mortgage compliance review.
“…what is most important is being able to provide something that documents the addition of a new fee, a fee increase or a lender credit decrease, and proof that the revised disclosure was given to the borrower within the allowable time frame.” –Shannon Howard, MetaSource Mortgage Compliance Review Manager
Download the full report to learn the cause of this #1 finding and how to avoid it in 2021.
Download the 2020 Mortgage QC Findings Report