Elevate Your Mortgage Origination Quality Assurance and Quality Control Program
Hauke Schupp
Director, Risk Practice, Clarendon Partners
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As mortgage rates decline, the lending landscape is expecting a surge in both new mortgage and refinance loan applications and originations. This increase in production demands that mortgage lenders (both retail and correspondent) prepare their Operations, Quality Assurance (QA), and Quality Control (QC) programs to maintain high standards to ensure seamless delivery to Fannie Mae, Freddie Mac, and Ginnie Mae and maximize loan delivery quality and minimize repurchase risks.
Why Now?
Increased Production: With mortgage rates falling, origination volumes are on the rise. Fannie Mae forecasts single-family mortgage originations to grow significantly in 2025, reaching $2.16 trillion[1]. Freddie Mac also projects a notable increase in both purchase and refinance volumes[2].
Quality Trends: The latest ACES Mortgage QC Industry Trends Report highlights a modest rise in critical defect rates to 1.58% in Q1 2024, ending five quarters of decline[3]. This uptick underscores the need for enhanced QA and QC measures given the projected increases in origination volume to address rising credit and compliance defects and minimize repurchase risk.
Regulatory Compliance: Ensuring compliance with evolving regulatory requirements is crucial. The ACES Mortgage QC Industry Trends Report also indicates a 208% increase in legal, regulatory, and compliance defects3, emphasizing the importance of timely inline QA during the loan production process and final post-closing QC.
Our Expertise
Clarendon Partners specializes in assessing and enhancing QA and QC programs for mortgage companies. We provide:
Comprehensive Assessments: Detailed evaluation of your current QA and QC programs and processes, identify gaps, and provide an actionable roadmap to improve operational efficiency and loan quality.
Tailored Solutions: Customized strategies to address specific challenges and improve overall effectiveness of your QA and QC programs and minimize repurchase risk.
Our Approach
Our approach and deep expertise in Mortgage originations and Quality Assurance / Quality Control enable us to assess your existing capabilities, design an optimized program, and implement the recommendations for a tailored and optimized QA and QC programs to increase your operational efficiency around people, process, technology, and data, elevate program effectiveness, and improve loan delivery quality to reduce repurchase risk.
Benefits of Partnering with Us
Enhanced Quality: Improve loan quality and reduce defect rates, ensuring eligibility for sale to Fannie Mae, Freddie Mac, and Ginnie Mae.
Increased Efficiency: Streamline your QA and QC processes to keep pace with rising production volumes, optimize the use of your QC and QC resources by evolving your programs, and move the controls points to the appropriate operational steps to optimize operational efficiency and control effectiveness.
Tailored Solutions: We are a boutique firm with experts in your specific industry and the ability to tailor your QA and QC program to be proportional to your organization while meeting regulatory requirements and seller guidelines.
Take the Next Step
Don’t let increased production compromise your loan quality delivery to the GSEs. Partner with us to assess and elevate your QA and QC programs and optimize your loan delivery quality in today’s dynamic mortgage market.
Contact Us Today at evolve@clarendonptrs.com to learn more about how we can help you.
[1] Economic Developments - September 2024 | Fannie Mae
[2] Freddie Mac Outlook March 2024
[3] ACES | Q1 2024 ACES Mortgage QC Industry Trends (acesquality.com)
Conclusion
AI governance is a complex but essential aspect of responsible AI deployment. By understanding your existing capabilities, identifying gaps to achieving the future state, and partnering with subject matter experts to accelerate your success you can ensure that their AI systems are not only innovative but also ethical, transparent, and compliant. As AI continues to evolve, so too will the regulatory framework, making proactive governance a critical component of long-term success in AI deployment.
Contact Clarendon Partners
To learn more about how to implement a comprehensive governance strategy for AI, schedule a consultation with our team of experts at evolve@clarendonptrs.com. We can help you navigate the complexities of this evolving landscape and develop a tailored solution that meets your organization's unique needs.