Cogent QC Systems provide quality control and compliance solutions for lenders of all sizes.  Among the most frequent challenges for which lenders currently seek solutions are:

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Bringing QC in-house

Challenge:          Outsourcing expenses are high, process is not flexible, still need to review results in-house
Solution:             Bring QC in-house to lower cost, increase flexibility, improve turn times

While many larger lenders outsource some reviews to accommodate volume spikes and small lenders may have no choice but to outsource QC reviews, the only way to gain control over your QC process, to ensure its efficacy and to keep costs under control is to do it in-house.  Our In-House QC vs. Outsourced QC analysis provides an overview of the issues to consider in making this decision.  In addition, a simple cost/benefit analysis illustrates, for a hypothetical lender, the economic benefits to be gained simply by following Cogent’s proprietary statistical sampling methodology.  The ROI and payback period is convincing.  If this methodology is also integrated into a system that embeds best practices in quality control and compliance auditing, then the gains are amplified.

Meeting new regulatory requirements

Challenge:          New regulatory requirements for originators and servicers mean frequent changes to QC scope
Solution:             Cogent QC Systems are flexible, with easy to change audit workflow and checklists

Ever-changing regulatory requirements – whether from Fannie Mae, Freddie Mac, HUD, the OCC, the FHFA or the CFPB – make Cogent’s flexibility and ease of use a tremendous added benefit.  System Administrators can quickly and easily modify the audit workflow, the audit questions and many other elements of the audit environment. In addition, the Systems keep track of historical checklists to ensure integrity when reporting on results from previous periods.

Expanding QC audits – Servicing, Prefunding, more

Challenge:          Lenders and servicers are expanding their QC scope
Solution:             Cogent’s ProductionQC System and ServicingQC System enable lenders and servicers to implement robust QC at all stages of origination and servicing

The traditional post-closing audit used to be the only QC or compliance audit required or practiced by most lenders.  That has changed over the last few years, with regulators (and the internal risk management departments of lenders and servicers) requiring QC checks at more and more points throughout the origination and servicing process .  The Production System accommodates multiple review types for originations, including pre-funding, post-funding, fraud, EPD, repurchase, appraisal and compliance – each with its own separate and independent sampling, auditing and reporting functions.  The ServicingQC System may include an unlimited number of audits, covering every servicing process and sub-process from loan boarding to payoff – typical audits in the ServicingQC System may be viewed here.

Improving Reporting and Analytics

Challenge:          Reporting of QC results is inadequate, not actionable, error-prone and/or time-consuming
Solution:             Cogent’s innovative management reports and custom Report Writer

One of Cogent’s innovations has been the introduction of sophisticated, actionable reports that provide statistically valid quality trends and comparisons. In contrast, many QC reports – even today – are the size of a small phone book and simply identify loans with adverse findings. Such reports force quality control departments to first find the relevant information, then evaluate its significance and only then decide what to do. Cogent’s clear, concise reports allow quality control departments to quickly analyze their business from different perspectives, continuously improve their processes and contribute to the profitability of their enterprise. For this reason, they actually get read by senior management.

Boosting QC productivity

Challenge:          QC and Compliance staff have grown too large and QC processes are inefficient
Solution:             Cogent’s Complete QC Solution

Because quality control and compliance audits have traditionally been viewed as no more than a necessary cost, organizations have spent precious little on technology to automate the processes. This has resulted in huge inefficiencies, redundant work and high full-time-employee (FTE) counts. Cogent has leveraged decades of experience in the industry to create integrated sampling and reporting capabilities to produce a total workflow solution that automates critical tasks and enhances the overall productivity of quality control departments. Cogent QC Systems not only minimize your sample sizes, they also make your entire QC process more efficient. Most new clients see productivity improvements of 50% or more in the key areas of sampling, auditing and reporting. This translates into lower staffing costs and/or better coverage of risks.

Meeting Increases in Volume

Challenge:          As Origination and Servicing volumes increase, so do the costs of quality and compliance audits
Solution:             Cogent’s statistical sampling reduces random samples

When large lenders and servicers told Cogent they wanted to reduce the burden of meeting Fannie Mae, Freddie Mac, and HUD quality control requirements, we pioneered the substitution of statistical sampling in place of the straight 10% sample then used for mortgage quality control. Our innovative methodology allowed lenders to reduce their random sampling to 2% or less of their total originations, resulting in immediate and significant cost savings for Cogent clients. By reducing their random sample sizes, lenders and servicers have been able to emphasize targeted reviews of the riskiest loans. This approach is fundamental to Cogent’s methodology and has greatly improved our clients’ efficiency, helping them achieve significant savings and better risk management.

Creating an Enterprise QC System of Record

Challenge:          Fragmented QC and compliance audits, lack of uniformity and outdated legacy systems
Solution:             Cogent QC Systems for an enterprise standard

In many organizations, loan quality control and compliance efforts are very fragmented. Multiple groups – including pre-funding QC, post-closing QC, compliance, fraud, repurchase, servicing, and others – have overlapping responsibilities and use different systems. The differing data formats and reporting approaches make it difficult for IT to support them and for senior management to make informed decisions. Cogent QC Systems are designed to be deployed across the enterprise (whether regionally, nationally or globally) so team members in different locations can work on the same system simultaneously. They are modular, which means organizations can deploy only the modules they require and add on new functionality as needed. And they use a common, standardized technology (Microsoft .NET and SQL Server) that enables data sharing across Cogent applications and with other systems in the enterprise.

Cogent QC applications are a major step forward in usability, power and flexibility. In stark contrast, many organizations still perform loan compliance and quality control on inferior ‘home-grown’ systems cobbled together by non-specialist IT personnel who have no experience in mortgage loan quality control or statistics. As with most home-grown systems, support is unavailable at worst and inconsistent at best.