Blog / Solutions

Why Outsourcing Mortgage QC Audits Is More Important Than Ever

Discover why outsourcing mortgage QC audits is more important than ever

Outsourcing mortgage quality control (QC) audits isn’t a new, brilliant notion that just hit the industry. In fact, outsourced QC services have been around for decades. However, today’s market challenges and production volumes may have you reconsidering taking another look at outsourcing this functionality to a reliable third-party QC provider.

After all, current trends with little relief in sight are driving more and more lenders toward this consideration.

The Challenges Lenders Are Currently Facing

The mortgage market is buzzing with challenges that lenders need to overcome. One obstacle that’s likely top of mind is rising interest rates. Since the Federal Reserve has started increasing the Federal Funds Rate, mortgage rates have skyrocketed and are still climbing.

According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage reached 5% in the second week of April. This is the highest mortgage rates have been in over a decade – and Freddie Mac’s data shows a continuous steady increase.

With inflation being a main cause for the climbing interest rates, falling mortgage applications is an unsettling result. The Mortgage Bankers Association’s (MBA) April 15th Mortgage Applications Survey revealed that applications decreased 5% from the previous week. This reduction in mortgage demand puts lenders in a position where decreasing costs is not just ideal – it’s crucial.

At the same time, the pressure to ensure compliance has heightened with increased regulatory scrutiny. The Consumer Financial Protection Bureau (CFPB) previously announced its commitment to resolving fair lending issues, and its recent questionnaires to banks prove them true to their word. The questionnaires suggest that the CFPB will be extending its fair lending focus beyond the areas that regulators have paid attention to in the past to include IMBs and vendors.

With all these challenges in front of you, it can be difficult to see the light at the end of the tunnel. This is where outsourcing mortgage QC audits comes in.

Why Outsourcing Mortgage QC Is the Solution

There’s no sign of interest rates declining anytime soon, which means that there’s also no sign of origination volumes picking up until supply issues are alleviated for the purchase money side of the market. In fact, Fannie Mae just recently cut its mortgage origination forecast for 2022 from $3 trillion to $2.8 trillion and its projection for 2023 from $2.7 trillion to $2.4 trillion. That said, the need to cut costs isn’t a short-term need.

By outsourcing mortgage quality control to a vendor, you convert from a fixed cost, in-house model to a variable cost model. This allows you to avoid overspending when volumes are low. At the same time, you can rest assured that you’ll have the resources you need to meet demand when purchase volumes pick up with the seasonal shifts and when housing supplies recover, increasing potential for sales.

Additionally, a reliable mortgage quality control partner can help you ensure compliance during this stressful time and beyond. With regulators increasing scrutiny on a variety of fronts, having a dedicated team of industry experts by your side could just be what you need to avoid non-compliance and the fines that accompany it.

Mortgage QC Outsourcing Success Story

Now, the secret’s out – outsourcing mortgage quality control is the answer to some of your expense control and most success-hindering problems. It almost sounds too good to be true…

Fortunately, there’s proof that it isn’t!

By outsourcing mortgage compliance audits, one of the nation’s top independent purchase lenders, Academy Mortgage, significantly reduced its QC costs. The lender saved the cost of one full-time, in-house underwriting auditor, one support staff member, and one manager. Academy Mortgage’s QC expense is now roughly 50% less than what it was in-house.

Additionally, the lender doesn’t have to worry about training QC auditors or keeping up with investor and agency guidelines for this particular department. MetaSource handles it all.

Want to learn more? Download the free case study!

Your Trusted Mortgage QC Partner

In order to achieve the benefits above through outsourcing mortgage quality control services, you need to select the right partner. At MetaSource, we offer post-close QC and pre-fund QC services with a variable cost model that enables our clients to maintain a strong financial state during any and every climate. Not to mention, our team of industry experts is dedicated to helping you ensure compliance and avoid unnecessary fines.

Contact one of our mortgage QC experts to learn more about how to implement the best practices listed above.

Contact us to learn more

Contact us today