The loan origination component of the Caldwell Quality Control Plan for Mortgage Lending organizes for you all of the procedures you need to cover loan origination QC from the borrower's application through developing the credit information, underwriting, closing and delivery. These guidelines help employees understand the requirements and the QC auditor test for problems. Many forms and checklists are included to assist with these tasks.  

Special Origination Considerations. Several areas of concern in mortgage origination call for special attention in the Quality Control Plan because they raise possibilities of fraud. These guidelines help avoid problems with payments to brokers under RESPA, information integrity, discrepancies in credit information and fraud in loan origination including strawbuyer transactions and inflated appraisals.

   

Initiating the Mortgage Transaction. The QC Plan addresses critical issues concerning the timing of disclosures to the applicant in connection with the application, procedures for obtaining credit information from the applicant and third party sources and policies on conducting the initial interview.

   

Borrower’s Credit History. The QC Plan organizes the steps for developing a picture of the applicant’s credit history including guidance concerning requirements of FHA, VA, Fannie Mae and Freddie Mac for handling and evaluating credit reports and other methods of establishing the applicant’s liabilities.

   

Borrower’s Assets. The Plan details the QC steps for verifying the existence and availability of liquid assets such as bank and other accounts, assets provided by others such as relatives, employers and nonprofit charitable or fraternal organizations as gifts or grants and various kinds of nonliquid assets.

   

Borrower’s Income. The Plan sets out requirements for the processing of documents verifying the borrower's income. It covers salaried income, self-employed income and a large variety of non-salaried other types of income that can be used to support a mortgage application.

   

Security Property and Valuation. The FHA, VA, Fannie Mae and Freddie Mac each have requirements for dealing with appraisers, obtaining property valuations and for the review and evaluation of appraisal reports. The Plan clarifies the many QC issues.

   

File Review. Careful review of the file after gathering all exhibits from the applicant and other sources is important to quality control. Information and other information must be compared to find any important conflicts or inconsistencies. The QC Plan provides procedures to accomplish this.

   

Underwriting. The Plan sorts out the many critical QC issues to take into account when reviewing a mortgage loan application in deciding whether to approve a loan. It addresses the acceptability of the appraisal, the inspections, the buyer's capacity to repay the loan and the acceptability of the loan for meeting FHA, VA, Fannie mae or Freddie Mac criteria.

   

Loan Closing. The Plan covers the numerous quality control and regulatory compliance issues employees and contractors face leading up to and including the closing. It addresses many RESPA and Truth in Lending Act concerns as well as issues involving the appropriateness of charges.

   

Certification, Endorsement and Delivery. The Plan addresses the certifications and warranties at the end of the mortgage origination process, before approval or endorsement of a VA or HUD loan or a Fannie Mae or Freddie Mac purchase, including representations that the lender makes depending upon the type of loan, the insuring agency and the investor involved.