What is mortgage quality control?

Mortgage quality control is a process used to ensure that companies involved in mortgage origination comply with all state and national laws related to those mortgages. Both lenders and mortgage brokers often need to develop a specific mortgage quality control plan that takes into account all applicable laws and regulations and helps ensure that the company is operating in compliance with those regulations. Such a quality control plan is one of the ways that quality control is achieved and maintained in the mortgage industry.

While the exact quality control process may vary depending on applicable laws and regulations, there are some basics that are most likely to be included in any plan. One has to do with lending policies associated with offering mortgage loans. This focuses on developing and maintaining criteria that the loan applicant must meet to be approved for the mortgage. As part of this aspect of the mortgage quality control plan, lenders and brokers will develop screening techniques that qualify applicants, effectively helping to reduce the risk of mortgage defaults.

Many approaches to developing an effective mortgage quality control plan include attention to processing the approved loan. The focus is on the timely creation of a customer file, the issuance of all relevant documents related to the credit approval and the timely transfer to the appropriate recipient. As part of this process, quality control would include the development of a checklist that includes all necessary tasks and is organized in a logical manner that helps in the efficient completion of these tasks.

Another key element of effective mortgage loan quality control is establishing policies that help ensure that all employees involved in loan origination and loan processing comply with state and national laws regarding passing background checks and have the proper licenses and credentials to be involved in transactions of this nature. The quality control process may also require compliance with internal requirements, such as adherence to the lender's confidentiality standards and participation in ongoing training as part of continued employment.

Mortgage loan quality control serves to protect the interests of all parties involved. This means that the guidelines drawn up as part of the quality control process contribute to consumers taking on a mortgage debt that they cannot reasonably manage. At the same time, private and confidential information is used only when necessary and is not shared with unauthorized parties. Quality control protects lenders by setting standards that must be met by any company that brokers or originates mortgages, keeping the industry stable and allowing lenders and others to stay in business for the long term.

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