HUD Handbook 4000.1 V.A — Quality Control of Lenders and Mortgagees

HUD Handbook 4000.1 V.A

c. Standard (09/30/2016) The Mortgagee must adopt and implement a QC Program that fully complies with the requirements of this Handbook 4000.1, and, where applicable, the additional Multifamily QC requirements outlined in the Multifamily Accelerated Processing (MAP) Guide, 4430.G. The Mortgagee must maintain and update its QC Program as needed to ensure it is fully compliant with all applicable FHA requirements at all times. The QC Program must cover the lifecycle of an FHA-insured Mortgage, including origination, underwriting, closing, endorsement, and servicing functions that are conducted by the Mortgagee. The QC Program must cover all policies and procedures, whether performed by the Mortgagee or outsourced to a contractor, to ensure full compliance with FHA requirements for Loan Administration. The QC Program must provide the Mortgagee’s management with information sufficient to adequately monitor and oversee the Mortgagee’s compliance, and measure performance as it relates to the Mortgagee’s FHA mortgage activity. i. Exception for Multifamily Mortgagees The following QC Program requirements do not apply to Mortgagees with Originate Multifamily, Service Multifamily, or Service/Originate Multifamily only authority. For Mortgagees with Originate Single Family/Multifamily, Service Single Family/Multifamily, or Service/Originate Single Family/Multifamily authority, these QC Program requirements do not apply to its Multifamily operations. • V.A.2.b.iii(A) Denied Mortgage Applications • V.A.2.b.iv Escrow Funds • V.A.2.b.vi Timely and Accurate Submission for Insurance • V.A.2.d.iv(F) Method of Reporting • V.A.3.a.i Time Frame for Selection and Review • V.A.3.a.iii Sample Size Standard • V.A.3.a.iv Sample Composition Standard • V.A.3.b Loan Sample Risk Assessment • V.A.3.c Origination and Underwriting Loan File Compliance Review • V.A.3.d Quality Control Reviews of Specialized Mortgage Programs • V.A.3.e Servicing Loan File Compliance Review • V.A.3.f.ii Servicing Reviews • V.A.4 Data Integrity • V.B Quality Control of Other Participants • V.C.2.a Title I Lender Monitoring Reviews • V.C.2.c Servicer Tier Ranking System II • V.C.3 Loan Level Monitoring • V.D Monitoring of Other Participants • V.E.3 Program Office Actions and Sanctions • V.E.5.e Specific Program Participants d. Required Documentation (09/20/2021) The Mortgagee must document the existence of its QC Program and evidence of its implementation, including written procedures, QC reports, and corrective action plans. All applicable documents must be dated to demonstrate compliance with the retention and reporting time frames in Quality Control of Lenders and Mortgagees. i. Time Frame for Retention documentation, Findings, and actions taken to mitigate Findings, for a period of two years from the initial QC review, or from the last action taken to mitigate Findings, whichever is later. ii. Production of Documents The Mortgagee must make all documentation relating to its QC Program available to FHA at any time upon request. a. Who May Perform Quality Control (03/14/2016) The Mortgagee may use employees or contractors to perform QC functions in accordance i. Employees The Mortgagee must ensure that employees who perform QC Program functions are, at all times, independent of all Loan Administration processes and do not directly participate in any of the Loan Administration processes represented in the QC Plan. The Mortgagee must ensure QC employees are not within any chain of reporting or management that is directly connected to Loan Administration staff. ii. Contractors The Mortgagee may contract with outside vendors to perform QC functions if: • the Mortgagee assumes full responsibility for the contractor’s conduct of QC reviews in compliance with FHA requirements; • the Mortgagee and the contractor have a valid contractual agreement in place that specifies the roles and responsibilities of each party; and • the Mortgagee acknowledges that the existence of such contract for the provision of QC services does not satisfy the Mortgagee’s obligation to have a written QC Plan that fully complies with FHA requirements. The Mortgagee must ensure that contractor employees who perform QC Program functions on behalf of the Mortgagee do not participate in any of the Loan Administration processes represented in the QC Plan.

Source: HUD Handbook 4000.1 V.A.1.c — Standard · source URL · snapshot 8c03836f77f317e1