With 2016 in the books, here is a look back on the top 15 mortgage quality control issues based on thousands of post-close QC audits that we performed over the past year.
All but three are compliance and TRID related. While we did see a slowdown in TRID findings as the year progressed it does illustrate the impact these regulations have had on the industry.
- Information listed in the Calculating Cash to Close table on page 3 of the Closing Disclosure corresponds to the information cited on the last disclosed Loan Estimate.
- Borrower received a Closing Disclosure at least three (3) specific business days prior to consummation.
- Closing Disclosure was provided in the file for review.
- Fees within the zero tolerance category that increased without a valid reason, were cured by the Lender on the final Closing Disclosure.
- All required revised Loan Estimates are supported by documentation of a valid COC and was provided to the borrower not more than three (3) business days of receiving information sufficient to establish a reason for re-disclosure.
- Loan Estimate was provided to the borrower not more than three (3) general business days after receipt of application.
- Verbal VOE was provided in file per AUS requirements. (DU requires VVOE not more than 10 days prior to the Note, VVOE after the Note would be acceptable.)
- There is evidence that the borrower shopped for all services listed in Section C. Services Borrower Did Shop For on Page 2 of the Closing Disclosure.
- Year-to-date and prior year income supports current income used. Income calculated by MCA Auditor matches amount used for qualifying. Any variations do not materially affect ratios.
- The final Loan Estimate is dated at least one (1) day prior to the initial Closing Disclosure and has been received by the borrower at least four (4) specific business days prior to consummation.
- Appraisal was not ordered prior to borrower’s acknowledgment of Intent to Proceed.
- Verification of assets for closing was provided for review. (All funds shown as paid at or prior to closing on the CD must be documented.)
- Loan Estimate was provided in the file for review.
- Correctly completed Security Instrument (i.e. Trust Deed, Mortgage) in file and signed by borrower(s).
- Fees within the ten percent tolerance category that increased without a valid reason, were cured by the Lender on the final Closing Disclosure.
If you have issues with any of the above mortgage compliance defects or findings, or don’t know if you do, let us know. We can even audit your internal auditors to see how they’re doing.