Cogent’s Statistical Sample Size Calculator has become a popular resource for quality professionals. To make it even more useful, we are launching a new Series of short articles called “Saving with Statistical Sampling”. The first few articles are listed on the Calculator page (and below), with active links for those already published. Each of these techniques has the potential to save you time, effort and money. We welcome feedback on any additional topics you’d like to see.

Here is the first set of topics:

1. Use a Statistically Calculated vs. Straight Percentage Sample
2. Improve Loan Quality and Reduce Sample Size
3. Decide How Much Precision You Need
4. Use One-Sided Confidence Intervals, Not Two-Sided
5. Take Credit for Previously Sampled Loans
6. Don’t Waste Time on Small Sample Sizes
7. Take Control Of Your Sampling

We are pleased to announce that Cogent QC Systems has once again been selected for the annual HousingWire Tech100 award, marking 2021 as the fifth time that Cogent has been chosen among this select group of technology providers.

Cogent’s highly customizable, workflow solutions for quality, compliance and risk management were cited here.

More information about the 2021 HousingWire Tech100 is available here:
2021 HW Tech100 Press Release
Full list of winners and their profiles

Among the factors that led to the win, the judges cited Cogent’s “…ability to continuously customize and automate workflows to minimize human error and streamline processes — lowering costs, optimizing quality and enhancing profitability.” 

Thank you again to the HousingWire judges. We are honored by the recognition.

The Cogent Team
info@cogentqc.com

Effective January 1, 2020, Fannie Mae has introduced a new standard for lenders who use statistical sampling to select loans for QC. Highlighted details can be found in the updated Selling Guide, on page 1070:

“If the lender uses statistical sampling for its selection process, at a minimum, the statistical sampling model (variables) must be calculated using a 95% confidence level with a 2% precision rate and a statistical statement of six months (Fannie Mae recommends using a three month statement.)”

What does this mean for you? How do you calculate the correct number of loans to sample and audit under the new standard? Cogent’s statistical sample size calculator makes it easy:

To calculate a six month statement – Enter the TOTAL estimated population for the 6 months (usually by extrapolating current origination levels). Then DIVIDE the calculated Sample Size by 6 to derive a sample size for a single month.

To calculate a three month statement – Enter the TOTAL estimated population for the 3 months (usually by extrapolating current origination levels). Then DIVIDE the calculated Sample Size by 3 to derive a sample size for a single month.

Thus, a lender originating an average of 1,000 loans per month might estimate a 6-month population of 6,000 loans. Assuming an expected incidence rate (or defect rate) of 5% and a precision target of 2%, the resulting Sample Size becomes 242. Dividing this by 6 months yields a monthly sample size of 40 loans.

For more information, please see the following:

– The article “Sample Examples – The Calculator in Action” provides guidance for using the Calculator below in various scenarios.

– For an explanation of Cogent’s sampling methodology, please see the white papers on our Resources page.

Effective January 1, 2020, Fannie Mae has introduced a new standard for lenders who use statistical sampling to select loans for QC. Highlighted details can be found in the updated Selling Guide, on page 1070:

“If the lender uses statistical sampling for its selection process, at a minimum, the statistical sampling model (variables) must be calculated using a 95% confidence level with a 2% precision rate and a statistical statement of six months (Fannie Mae recommends using a three month statement.)”

What does this mean for you? How do you calculate the correct number of loans to sample and audit under the new standard? Cogent’s statistical sample size calculator makes it easy:

To calculate a six month statement – Enter the TOTAL estimated population for the 6 months (usually by extrapolating current origination levels). Then DIVIDE the calculated Sample Size by 6 to derive a sample size for a single month.

To calculate a three month statement – Enter the TOTAL estimated population for the 3 months (usually by extrapolating current origination levels). Then DIVIDE the calculated Sample Size by 3 to derive a sample size for a single month.

Thus, a lender originating an average of 1,000 loans per month might estimate a 6-month population of 6,000 loans. Assuming an expected incidence rate (or defect rate) of 5% and a precision target of 2%, the resulting Sample Size becomes 242. Dividing this by 6 months yields a monthly sample size of 40 loans.

For more information, please see the following:

– The article “Sample Examples – The Calculator in Action” provides guidance for using the Calculator below in various scenarios.

– For an explanation of Cogent’s sampling methodology, please see the white papers on our Resources page.

We’ve just posted a new webinar – “How to Automate Final Decisions in Cogent QC Systems” – that takes a deep dive into the Types of Automated Final Decisions available in Cogent – the rules that drive them, how they differ, and how to enable and implement each type.

Webinars are available at on our clients-only webpage here. If you do not have the required password, please contact info@cogentqc.com.

As always, we’re keen to hear back from you. Let us know what other topics you’d like us to cover.