In between the vendor due diligence support I manage for LoanLogics, I’m doing demos of our solutions to prospective clients on the regular. During those discussions, one of the features I’m always keen on pointing out, particularly to those looking for outsourced QC services, is the Audit the Auditor module in our loan quality management platform, LoanHD®.
Audit the Auditor is an automated tool that allows a QC services client to select a random sample of loans to analyze that their audit service provider has reviewed. Once a loan is selected, the client can view tests that have failed, review auditor commentary, provide supporting rebuttal detail and put any loans into queue for further follow up.
All of this of course satisfies the Agencies’ requirement for at 10% monthly review of the work performed by your chosen vendor. It can also be easily done while the Agency is on site for an audit to showcase there are automated and well-documented procedures in place to perform it. I’d also be remiss to say that it is also recommended these spot checks be performed on in-house staff, as well.
I previously spoke about Audit the Auditor and two other great tools that support agency audits in a prior blog post.
The genesis for today’s post was to follow up on that one with one that emphasizes the importance of taking the information uncovered in the spot check of your QC provider and doing something with it. I was talking with one of our awesome QC managers, Jenevieve, recently who shared with me how some of her services clients are taking the findings and discussing it in their monthly collaboration calls.
During these meetings the two groups meet to not only discuss trends found in the standard monthly reporting but also to dive into more specific detail about what they found while “Auditing the Auditor.” Said differently, the client can review the findings their audit service provider flagged on the loans they sample tested on their own. Sometimes this leads to more education around a certain guideline or just simple clarity around a data or document discrepancy. Either way, it’s all well documented so it can be addressed together as easily as 1, 2, 3.
Maintaining loan quality is a critical task no matter what part of the process you’re involved in- production, sale or servicing. That’s why it’s important to work with a QC provider that makes it easy to collaborate and understand the reason and results of what they’re providing you.