Auditor? Lender? Reduce Your Liabilities! 

Get it Right the First Time!

As a lender or an auditor for a lending institution, the transaction of the loan itself, how it was derived, and all the moving parts determining eligibility must be warranted by accuracy to minimize risk and maintain viability.  U.S. Lender Audit's^TM ability to help place proper underwriting peace of mind for lenders is a phone call away.  Get a review of each selected file to ensure conformance to investor/regulatory requirements, sound underwriting and closing decisions were made. Specific areas of review include:

• Ensure loan was properly underwritten and sound judgment used
• Credit documents and calculations are reviewed to ensure the borrowers have demonstrated the ability and willingness to repay the debt.
• Appraisals are reviewed to ensure that the subject property represent adequate collateral for the mortgage.
• Red Flag reviews are conducted on all loans to identify if there are any inconsistencies that may be indicative of fraud or misrepresentation.
• Closing documentation is reviewed to ensure conformance with guidelines.
• Disclosure documents are review to ensure compliance.
• Anti-Predatory Lending (HOEPA Section 32) state and federal compliance.

The conclusion of the review will be a generated reports forwarded to the client. The reports are as follows:

• Loan Rating Detail
• Individual Loan Summary, and Results Detail
• Detailed Exception Report
• Exception Analysis by Area of Responsibility
• Loan Rating by Originator
• Loan Rating by Underwriter
• Loan Rating by Loan Type
• Loan Rating by Loan Purpose
• Specialized reports can be prepared at the clients' request.

The auditing company prepares a QC file for each loan audited. The QC folder will identify the client and the specific audit and loan number and the borrower's name. The QC file contains the following:

• Copies of all forms and loan documents supporting the exceptions
• Merged in-file credit report if required
• RMCR if required
• Field review appraisal if required
• All returned re-verification information

The auditing company provides post funding and pre funding quality control reviews and audits through an outsourcing agreement.  Reviews are provided for FNMA, FHLMC, FHLB, FHA, Conventional, Sub prime, and VA Loans.  This allows the mortgagee and loan correspondents to devote their full attention to increasing production.

The auditing company utilizes the latest technological resources along with a staff of experienced underwriters to provide a thorough audit of your files.  Each file is dealt with the highest level of confidentiality and reviews are completed in an expedient manner.

U.S. Lender Audit's^TM Forensic Auditing Servicer Includes:

§  File Selection

§  Re-verification

§  Appraisal Review

§  Debt Ratio and Closing Analysis

§  Loan Documentation

§  Fraud Detection

§  *Five Business Day Turnaround (bulk orders may need to be extended)

U.S. Lender Audit's^TM servicer produces management reports with easy to read risk assessments, trend analysis, and personnel reports.  The report also provides a detailed analysis of each loan review.  The reports can be grouped by branch office, underwriter, processor, broker or correspondent.

Closed Loan Audit Procedures

Loan Selection;

A random 10% or a 2% sample that will provide a 95% confidence level will be chosen from closed loans on monthly basis.  If fewer than 10 loans are closed monthly, a 90 day sample will be selected. If fewer than 10 loans are closed annually one loan from the year will be selected.

Random selection shall assure all loan officers, processors, underwriters, and appraisers are subjected to review

A minimum of 10% of total loans rejected will be reviewed, concentrating on three particular areas. First, the reasons given for rejection must be reviewed and determined to be valid.  Second, the company must ensure that a senior staff person or officer of the company or a committee chaired by a senior staff person or officer concurred with the rejection.  The company will also ensure that the requirements of the Equal Credit Opportunity Act are met and documented in each file.  Where possible discrimination is noted, the mortgagee is expected to take immediate corrective action.

Document Review and Verification

Credit Report

A new credit report will be obtained for each borrower whose loan is included in a Quality Control review, unless the loan was a streamline refinance or was processed using an approved automated underwriting system exempted from this requirement.  A credit report obtained for a Quality Control review may be a Residential Mortgage Credit Report, a three repository merged in-file report or, when appropriate, a business credit report.  The report must comply with the credit report standards described in the appropriate sellers guide.  A full Residential Mortgage Credit Report must be obtained from a different credit source on cases in which the in-file report reveals discrepancies with the original credit report.

Verifications

All verifications, gift letters, other credit related documents, and the original loan are re-verified.

Re-verification requests will be sent with a cover letter from the Company to the address shown on the verification to certify that the figures, signatures and information were correct and the signatory had the authority to sign the verification as of the original verification date.

Credit Document Re-verification

Documents contained in the loan file will be checked for sufficiency and subjected to written re-verification.  Examples of items that will be re-verified include, but are not limited to, the mortgagor's employment or other income, deposits, gift letters, alternate credit sources, and other sources of funds.  Sources of funds will be acceptable as well as verified.  Other items that may be re-verified include mortgage or rent payments.  If the written re-verification is not returned, a documented attempt will be made to conduct a telephone re-verification.  If the original information was obtained electronically or involved alternative documents, a written re-verification will still be attempted. Any discrepancies will be explored to ensure that the original documents (except blanket verification releases) were completed before being signed, were as represented, were not handled by interested third parties and that all corrections were proper and initialed.  All conflicting information in the original documentation will be checked to insure it was resolved before the complete file was submitted to the underwriter.

Appraisals

A desk review of the property appraisal will be performed on all loans chosen for a Quality Control review except streamline refinances and Real Estate Owned (REO) sales.  The desk review will include a review of the appraisal data, the validity of the comparables, the value conclusion, any changes made by the underwriter and the overall quality of the appraisal.

The company will contract field appraisal reviews on 10% of the loans selected during the sampling process outlined previously in paragraph.  Field reviews will be performed by licensed appraisers.  The company will select loans for field reviews based on factors such as the following:                                     

·         Discrepancies found during desk reviews

·         Large adjustments to value

·         Comparable sales more than six months old

·         Excessive distances from comparables to the subject property

·         Repetitive sales activity for the subject property

·         Investor-sold properties

·         Identity of interest between buyer and seller

·         Seller identity differs from owner of record

·         Vacant properties

·         Value increased 20% or more within 12 months of a previous sale.

In addition, a field review will be completed on loans selected if serious deficiencies or patterns are uncovered,

Occupancy Re-verification

In cases where the occupancy of the subject property is suspect, the company will attempt to determine whether the mortgagor is occupying the property.  If it is found that the mortgagor is not occupying a property mortgaged as owner-occupied, the company will report this, in writing.  The company will also advise further review of other similar loans for occupancy.

Underwriting  Decisions.

Each loan selected for a quality control review will be reviewed for compliance with FNMA, FMHLC, FHLB, VA, HUD  and any applicable sub prime underwriting requirements, sufficiency of documentation and the soundness of underwriting judgments.

Condition  Clearance and Closing.

Each loan selected for a quality control review will be reviewed to determine whether:

·               Conditions which were required to be satisfied prior to closing were in fact met prior to closing;

·               The seller was the owner of record, or was exempt from the owner of record requirement in

            accordance with FNMA, FMHLC, FHLB, VA, and HUD regulations;

·               The loan was closed and funds disbursed in accordance with the mortgagee's underwriting and

            subsequent closing instructions; and

·               The closing and legal documents are accurate and complete.

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