Important phases in the mortgage post-closing process include reviewing the file’s documents, having a third party re-verify them, analyzing credit risk, evaluating the underwriting, complying with taxes and insurance laws, etc. The gathering and processing of all trailing papers are closed at this point. All investor guidelines are observed, and it is made sure. To ensure everything is complete and compliant, thorough audits and reviews are conducted.
Before sending the loan documents to the appropriate service provider, it is checked to ensure they have all been signed and processed. Quality control reports are produced to draw attention to inconsistencies and potential errors. The loan is sold once the aforementioned stages have been correctly completed. In the wake of this, the borrower is informed about the loan sale and is sent the closing papers.
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Tips to Check the Accuracy of Loan Applications: Post Closing Mortgage Audit
Here are some top post closing mortgage audit tips to check the accuracy of loan applications:
Review of Files
This process takes a long time without the necessary technical assistance and expertise. It is suggested that lenders work together with a group of auditors equipped to carefully examine each mortgage file, beginning with the first application, and ending with the closing papers. An audit checklist is used during this procedure.
The audit checklist needs to be created as per the most recent regulatory revisions and to the specifications of the CFPB, Freddie Mac, TRID, Fannie Mae, FHA, VA, and HUD. To complete the Post-Closing procedure, several documents must be provided. Lenders must carefully review each document to ensure it has been completed correctly and accurately.
The lender must attest that the loan was evaluated in compliance with Fannie Mae’s specifications, and the underwriting decision should be well supported in the loan file. The closing documentation should contain only information that is consistent with the final loan terms and the underwriting decision. All verification messages and approval conditions that occur in the findings report for loans that are underwritten using the automated underwriting system DU (Desktop Underwriter) must be handled and properly documented.
The Re-verification of Finances
The lender must recalculate the CLTV and LTV (Loan to Value Ratio) (Combined Loan to Value Ratio). The loan-to-value ratio reflects the loan’s quality. The collateral may not be sufficient to cover the loan amount in the event of default if the loan-to-value ratio is too high. The lender will need to recalculate the LTV and CLTV at this step to ensure it is within the acceptable range.
This process also involves recalculating liabilities and debt-to-income ratios. Liabilities are reassessed to determine the borrower’s financial situation and whether they can repay the debt with their current ability to generate income. The lender must also look into the borrower’s employment and assets.
These crucial examinations must be passed to qualify for Freddie Mac and Fannie Mae. The down payment, reserve requirements, and closing fees must all be re-verified as part of the re-verification of the borrower’s assets.
Report Results
The QC review is finished within 30 days of the month, and the Audit Team’s findings must be compiled and conveyed to the top management level for a final assessment. The final report should be thorough, including specific findings for each audited loan.
The post close QC audit support services must include the final defect rate for the outcomes of the current review period, the issues and major flaws, intended corrective activities, a thorough report summarising the findings, and a breakdown of underwriting and compliance flaws. The lender must notify Fannie Mae within 30 days of the confirmation if any review findings are made that render the loan ineligible.
Evaluation Desk Review
Assessment Desk Review is the process of examining the work of the initial appraiser. Although the reviewer need not be an appraiser, they should be knowledgeable about the market area and qualified to judge whether the data presented in the report is accurate, discuss the suitability of comparable property sales, and conclude the appraiser’s final value is properly supported by documentation. The person should check the original appraiser’s figures for mistakes or incorrect calculations.
Post-closure mortgage glitches, lack of oversight, and follow-up continue to hinder a property’s selling. Previous and upcoming real estate crises have uncovered mortgage closing flaws. The government tightened regulations on forms, affidavits, and sale documents. Such scrutiny made lenders’ post-closing procedure more important.
Conclusion
Mortgage Post-Closing services are extensive and contain important stages that must be completed for the advantage of lenders. To prevent mistakes, it needs to be done with the highest level of care, experience, and technological support. Mortgage Post-Closing services are never the lenders’ main business. Therefore, outsourcing mortgage post-closing services and giving them to a professional would improve efficiency and eliminate the possibility of error to ensure everything is complete and compliant.