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Independent QC Audit: Fannie Mae Post-Closing QC Process Updates

Question:

Does Fannie Mae require its Seller/Servicers to perform an independent audit of the Post-Closing QC Process?  If so, what’s changed?

Answer:

Yes, in an August 7, 2019 announcement, FNMA added further guidance to its Lender Post-Closing QC Review requirements. Chapter D1-3-06 of the Selling Guide specifically calls for an independent audit of the Lender's QC processes and procedures. 

The lender must have an independent audit process to ensure the following:

• Its post-closing QC process and procedures are followed by the QC staff
• Assessments and conclusions are recorded and consistently applied
• Findings must be accurately recorded and consistent with the defects noted in the lender’s system of record

Results of the QC audit must be distributed to senior management. The audit results must include an affirmative statement that no influence from other business units or bias in the QC conclusions was apparent. Management must distribute the results to the appropriate areas within the organization and an action plan must be established for remediation or changes to policies or processes, if appropriate. The lender must provide a copy of the QC audits and the audit of the QC process to Fannie Mae upon request.

Requirements related to QC independence must be incorporated into the lender’s QC plan and implemented by January 1, 2020.