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What is Mortgage Quality Control?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 September 2016
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Mortgage quality control is a process that is used to make sure that companies participating in the issuance of mortgages comply with all state and national laws related to those mortgages. Lenders as well as mortgage brokers are often required to develop a specific mortgage quality control plan that accounts for all applicable laws and regulations, helping to ensure the business operates in harmony with those regulations. A quality control plan of this type is one of the ways that quality control in the mortgage industry is achieved and maintained.

While the exact process of quality control will vary based on applicable laws and regulations, there are a few basics that are highly likely to be included in any plan. One has to do with the lending policies associated with offering mortgage loans. Here, the focus is on developing and maintaining criteria that must be met by the loan applicant in order to be approved for the mortgage. As part of this aspect of the mortgage quality control plan, lenders and brokers will develop screening techniques that qualify applicants, effectively helping to reduce the potential for mortgage defaults.

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Many approaches to developing an effective mortgage quality control plan also include attention to the processing of the approved loan. The focus in this instance is on the timely creation of a customer file, the issuance of all relevant documents associated with the approval of the loan, and the timely transfer of funds to the appropriate recipient. As part of this process, the quality control effort would include the development of a checklist that includes all necessary tasks, organized in a logical manner that aids in the efficient completion of those tasks.

Another key element of effective mortgage quality control is setting policies in place that help to ensure all employees engaged in the lending and loan processing efforts are in compliance with state and national laws in terms of passing background checks, and holding the proper licensing and credentials to be engaged in transactions of this type. The quality control process may also require compliance with in-house requirements, such as observing the confidentiality standards of the lender and participating in ongoing training as part of their continued employment.

The purpose of mortgage quality control is to protect the interests of all parties concerned. This means that the policies established as part of the quality control help to prevent consumers from taking on a mortgage debt that they cannot reasonably manage. At the same time, private and confidential information is only used when and as needed, and is not released to unauthorized parties. Quality control protects lenders by setting standards that must be observed by any entity that brokers or provides mortgages, helping to keep the industry stable and provide lenders and others the opportunity to remain in business over the long term.

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