Fannie Mae Quality Control Requirements
What are some examples of quality control practices our company must have in place to comply with the Fannie Mae Selling Guide?
In its recently released list of Seller/Servicer Risk Self-Assessments, Fannie Mae included a quality control (QC) checklist that helps approved lenders ensure their QC meets the minimum requirements in the Fannie Mae Selling Guide.
This checklist includes sections on Governance/Authority, Defect Rate, Pre-funding QC, Post-Closing QC, Appraisals, Reporting, QC Vendor and Third-Party Originations.
We will detail one requirement below: “Defect Rate”.
Fannie Mae views defect rate as an effective way to establish loan quality targets to model the financial exposure created at a certain defect level. The concept of “zero defects” generally will be considered challenging to achieve, and Fannie Mae does not evaluate lenders by a zero-defect-rate standard. Instead, Fannie Mae expects lenders to set defect rate targets as reasonably low as possible based on a formal cost–benefit analysis of meeting that target and then demonstrate to Fannie Mae how they are managing loan quality to meet their established target.
In its Defect Rate checklist, Fannie Mae asks Seller/Servicers to affirm the following: