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Thursday, January 7, 2010

Mortgagee Letter 2011-02 - Quality Control - Much Ado About Nothing

BULLETIN - Detailed treatment to follow

We reviewed the mortgagee letter over and over to look for what was actually "NEW" in this mortgagee letter, relative to what we have been telling people to do all along.  Everything listed is currently in effect, so there is nothing "NEW".  Perhaps this is emphasis that lenders must take certain responsibilities more seriously 

TPO QC Reviews

Since brokers aren't being approved anymore, HUD has stated that sponsors of brokers must review brokered loans in the same way that direct originations are reviewed. 
  • If you wholesale, you must establish sampling methodology for brokers
  • Example: 10% to include one from each originator/MLO that submits a loan per review period (week, month or quarter) or other statistical model.
All Lenders must
  • QC all early payment defaults
  • QC a sampling of denials, and should QC all denials for Fair Housing Compliance
  • Report Loan Sales and Servicing Transfers
  • Report all fraud and material deficiencies to your HOC immediately
For our QC Customers, the only thing that changes is you must reflect your sampling method for your brokers if you wholesale. 

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