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They say that anyone who represents themselves in court has a fool for a client. I am not calling any lender a fool. But, there are situations that require an expert in order to achieve the desired result.
Even with all of the recent changes in the GSE Representation and Warranty framework and HUD’s Indemnification Policy, lenders still have uncertainty and significant monetary exposure to repurchase or indemnification requests. However, these demands can be challenged successfully.
If a lender is presented with a repurchase or indemnification, the first response should be to review the loan by an unbiased, third party to assess the particular issues raised. Any legitimate grounds to mitigate the issues should be explored so that the issuing party will rescind the request.
In these cases, when outsourcing your Quality Assurance and Quality Control process, to a company like LoanLogics, you get the advantage of having a third party perform an independent review by highly skilled, trained, and seasoned professionals, who have the expertise in handling these matters.
Recently, a client was presented with an indemnification of an Early Payment Default (EPD) loan for not manually downgrading the AUS recommendation. The lender unsuccessfully tried twice to refute the findings before reaching out to LoanLogics. We performed the EPD audit and disagreed with the determination for the indemnification.
We reviewed the loan and prepared a response to the indemnification request and were successful in getting the indemnification rescinded and saved the client from significant losses.
This is one of the additional benefits that many people don’t see when outsourcing their QA and QC functions to a third party vendor with experience and expertise. Sometimes, you need the expert to represent you.
Doctors don’t perform surgery on themselves (except on TV). But, lenders should take advantage of having an expert on their side when disputing indemnifications.
