MetaSource Mortgage Blog

Top 15 Mortgage QC Findings for 2021

  • Wednesday, February 16, 2022
2021 Mortgage QC Findings

In a year in which record mortgage volumes collided with staffing shortages and ongoing economic volatility, mortgage quality control difficulties remained mostly the same as years prior. However, there were some new challenges in 2021.

This findings report digs into those new challenges, provides MetaSource’s top 15 findings for the year, and offers advice on how you can avoid findings in 2022.

Top QC Findings for 2021

Here is the complete list of our top 15 mortgage QC findings for 2021, including all loan types and both regulatory and agency findings:

Rank
Finding
1
Closing Disclosure – Defective – Tolerance
2
Closing Disclosure – Defective
3
Income Documentation – Aged
4
Closing Disclosure – Defective – Calculating Cash to Close
5
Other Application/Processing Documentation – Intent to Proceed
6
Product Parameter – Points & Fees
7
Other Application/Processing Documentation – Loan Estimate – Timing Violation
8
Income Not Documented – Other
9
Closing Disclosure – Timing Violation
10
Insufficient Assets to Close
11
DU or AUS Findings Report – Missing or Defective
12
Incorrect Income Calculation – Other
13
Property Insurance Policy Not Documented – Missing or Defective
14
Other
15
Other Application/Processing Documentation – Case Number Assignment – Missing or Defective

 

#1 Finding: Still a Continuous Trend

The finding “closing disclosure tolerance defects” tops the list, as it has in five of the last six years. Even so, there were signs of a worsening trend in 2021, claiming over 15% of all MetaSource significant findings, compared to around 13% in 2020.

Why is this the case?

MetaSource Senior Director of Mortgage Services, Brady Meadows provided some insight: “As best we can tell, this is because lenders were so busy trying to keep up in 2021, that documentation took a back seat.” Meadows explained that many lenders did not fail to adhere to tolerance regulations, but rather failed to provide MetaSource with the required documentation.

Documentation issues were also prevalent in MetaSource’s analysis of top findings by Fannie Mae category. Loan package documentation was by far the largest Fannie Mae category of defects, accounting for more than 60% of the findings.

MetaSource 2021 Mortgage QC Findings

Income Documentation: A Source of Difficulty for Lenders in 2021

There was a steep increase in the number of income documentation aged defects, with 43% more significant findings related to documenting borrower incomes than in the previous year – pushing income documentation defects to 3rd in ranking in 2021, up from 10th on our 2020 list.

Download the full report to learn why this increase occurred, what other findings moved up the list in 2021, and how you can minimize findings in 2022.

Download the Full Report Today