Top 15 Mortgage QC Findings for 2022
Blog post originally posted on the MetaSource Mortgage Blog
For the mortgage industry, 2022 must have felt a bit like whiplash: from the chaos of record volume and staffing shortages in 2021 to plummeting originations and layoffs just a year later. And mortgage quality control was not immune to the effects of such see-sawing industry challenges.
While “closing disclosure tolerance defects” held the first spot in the MetaSource Team’s top QC findings list – as it consistently has for years, our analysis revealed a troubling pattern in the rise of defects that most closely correlate to repurchase risk. In 2022, four such defect categories jumped in the rankings.
This findings report provides details behind those numbers, along with some tips for how you can prevent findings – and repurchase risks – in 2023.
Top QC Findings for 2022
Here is the complete list of our top 15 mortgage QC findings for 2022, including all loan types and both regulatory and agency findings:
- Closing Disclosure – Defective – Tolerance
- Product Parameter – Points and Fees
- Income Documentation – Aged
- Income Not Documented – Other
- Closing Disclosure Defective – Calculating Cash to Close
- Insufficient Assets to Close
- Closing Disclosure – Defective
- Other Application / Processing Documentation – Loan Estimate – Timing Violation
- Other Application / Processing Documentation – Intent to Proceed
- Incorrect Income Calculation – Other
- DU or AUS Findings Report – Missing or Defective
- Closing Disclosure – Timing Violation
- Undisclosed Liability
- TILA Finance Charge Violation
- Property Insurance Not Documented – Missing or Defective
Documentation Challenges: The Mortgage QC Equivalent of “Noise”
As the MetaSource Team predicted in our 2021 QC Findings Report, closing disclosure tolerance defects topped the list in 2022 amid a documentation-trouble streak that includes six of the last seven years.
“One thing we see year-over-year is the constant waste of time spent chasing (missing) documents,” said MetaSource Senior Director of Mortgage Services Brady Meadows.
Many documentation issues are the mortgage QC equivalent of “noise,” Meadows said. They aren’t considered genuine business threats, but are, instead, seen as a persistent background irritation that signifies inefficiency. Nevertheless, they almost certainly come with a price tag.
And some documentation issues are much “louder” – and cause much more financial harm – than others. Take income documentation aged defects as an example. They often result in repurchase demands, making them a major problem for lenders.
Download the full 2022 QC Findings Report to learn about the top defects that result in repurchase demands and how to reduce findings and risk in 2023.