Common use of Quality Control Staffing Clause in Contracts

Quality Control Staffing. ‌ All post-Closing QC employees (including those related to establishing, monitoring, and enforcing procedures) must be independent of the production, underwriting, and closing departments, except in situations when the size of the organization is insufficient to support adequate resources to allow for separation of these functions. In these cases, the QC plan must include the rationale for the lack of separation as well as the controls that have been established to mitigate the potential risks associated with the lack of separation of these functions. The QC Plan must include minimum skill set and expertise requirements for the staff performing the pre- Closing and post-Closing QC reviews and document these minimum job qualifications in its QC plan. PFIs are responsible for ensuring that all individuals conducting QC reviews are adequately trained and have sufficient experience relative to the reviews being conducted. This training and experience should cover 66 MPF Announcement 2017-13 (3/28/17) manually underwritten Mortgage Loans and those underwritten with the assistance of DU or Loan Product Advisor. Reviewers conducting more complex or specialized reviews (for example, Appraisal reviews and self-employed Borrower reviews) must have the proper knowledge and experience to do so. Detailed policies and procedures for the QC review process must be provided to all employees who will be involved with the QC reviews. Quality Control Outsourcing‌ Third-Party QC service providers are permitted for all or a portion of the QC process. When using such vendors, the PFI is responsible for developing and maintaining loan quality standards and developing a QC plan to achieve those standards. The PFI is accountable for its overall QC program and for ensuring the QC reviews comply with the MPF Program requirements, regardless of whether the work is performed by the PFI itself or by an outsourced QC service vendor. Use of QC vendor is not a substitute for the PFI establishing and maintaining its own QC plan. The PFI must ensure that the QC vendor conducts its reviews in accordance with the PFI’s QC plan. The QC vendor must have written policies and procedures detailing its review methodologies, including selections and identification of defects and trends, as well as the required reporting of any results. The vendor’s review staff must possess the qualifications and experience required to provide quality reviews and meaningful analysis, and that the vendor’s policies and procedures align with the PFI’s policies and procedures and meet the MPF Program’s guidelines. The PFI must fully incorporate the results of the vendor’s reviews into its QC reporting and remediation processes. The PFI must have procedures to associate the appropriate severity level to the identified defects, and to implement corrective actions within the PFI’s organization, the same as it would for defects identified by the PFI’s staff.

Quality Control Staffing. ‌ All post-Closing QC employees (including those related to establishing, monitoring, and enforcing procedures) must be independent of the production, underwriting, and closing departments, except in situations when the size of the organization is insufficient to support adequate resources to allow for separation of these functions. In these cases, the QC plan must include the rationale for the lack of separation as well as the controls that have been established to mitigate the potential risks associated with the lack of separation of these functions. The QC Plan must include minimum skill set and expertise requirements for the staff performing the pre- Closing and post-Closing QC reviews and document these minimum job qualifications in its QC plan. PFIs 66 MPF Announcement 2017-13 (3/28/17) are responsible for ensuring that all individuals conducting QC reviews are adequately trained and have sufficient experience relative to the reviews being conducted. This training and experience should cover 66 MPF Announcement 2017-13 (3/28/17) manually underwritten Mortgage Loans and those underwritten with the assistance of DU or Loan Product Advisor. Reviewers conducting more complex or specialized reviews (for example, Appraisal reviews and self-employed Borrower reviews) must have the proper knowledge and experience to do so. Detailed policies and procedures for the QC review process must be provided to all employees who will be involved with the QC reviews. Quality Control Outsourcing‌ Third-Party QC service providers are permitted for all or a portion of the QC process. When using such vendors, the PFI is responsible for developing and maintaining loan quality standards and developing a QC plan to achieve those standards. The PFI is accountable for its overall QC program and for ensuring the QC reviews comply with the MPF Program requirements, regardless of whether the work is performed by the PFI itself or by an outsourced QC service vendor. Use of QC vendor is not a substitute for the PFI establishing and maintaining its own QC plan. The PFI must ensure that the QC vendor conducts its reviews in accordance with the PFI’s QC plan. The QC vendor must have written policies and procedures detailing its review methodologies, including selections and identification of defects and trends, as well as the required reporting of any results. The vendor’s review staff must possess the qualifications and experience required to provide quality reviews and meaningful analysis, and that the vendor’s policies and procedures align with the PFI’s policies and procedures and meet the MPF Program’s guidelines. The PFI must fully incorporate the results of the vendor’s reviews into its QC reporting and remediation processes. The PFI must have procedures to associate the appropriate severity level to the identified defects, and to implement corrective actions within the PFI’s organization, the same as it would for defects identified by the PFI’s staff.