Cogent has won Mortgage Technology magazine’s 2011 Lasting Impact Award.  The Lasting Impact Award acknowledges an individual, group or company responsible for a technology initiative or development proven to have an enduring influence that has transformed mortgage finance.

In presenting the award, the judges cited Cogent’s “fundamental innovation as adapting quality improvement principles from manufacturing industries to the mortgage industry.”  For more information, see the links below.

See Mortgage Technology award citation here (PDF)

See how Cogent QC Systems has made a Lasting Impact.

This is a welcome validation of everything Cogent has been doing since 1991 to help lenders across the industry to improve origination and servicing quality .  Many thanks to the judges at MT magazine.

For the second time, Cogent QC Systems has been selected as a finalist for Mortgage Technology magazine’s Lasting Impact Award.  The Lasting Impact Award “acknowledges an individual, group or company responsible for a technology initiative or development proven to have an enduring influence that’s transformed mortgage finance.”

 

Cogent has been recognized by Mortgage Technology five times in the past decade, receiving the Fix-It Award in 2003, Top 100 Vendors in 2005, Top 25 Vendors in 2006, runner-up in the Lasting Impact Award in 2009, and finalist for the Lasting Impact Award in 2011.

Cogent’s commitment to continuous improvement, in partnership with our clients, is an integral part of our corporate culture.  For more information on why Cogent QC Systems lead the industry, check here.

Posted by Kaan Etem

In the world of mortgage quality control (QC), the process of communicating the QC department’s findings to the field, recording their feedback and working together to resolve adverse QC findings has been notably inefficient.  In some companies, the QC department schedules regular weekly calls with the field, which may include branch managers, regional origination groups, servicing departments, or similar players.  During these calls, which can last hours, the field often questions the adverse findings of QC, while QC defends its actions.  Alternatively, QC departments may perform this process by exchanging emails and file attachments with the field.  And sometimes, it’s a combination of both.  Whatever the case, the systems that have evolved to document and track this process are sub-optimal.  Usually invented by business users – outside their usual job descriptions, using whatever tools are at hand (Excel, Word, Access, etc.) – these systems are usually cumbersome, error-prone and not secure.

Cogent’s first attempt at improving this process was to use the same familiar tools but to integrate the exchanged data with the Cogent QC System. Thus, the System automated the gathering and generation of QC findings and exported them to Excel worksheets that were attached to outgoing emails.  The field provided feedback to QC using specific cells in the Excel spreadsheets, which they then re-attached to emails that were returned to QC.  Finally, QC imported the feedback from the Excel spreadsheets into the Cogent QC System, which tracked returned and outstanding feedback items and allowed reporting on returned feedback.  This approach imposed some controls on the workflow, integrated feedback into the audit record, and facilitated reporting.  However, there were still shortcomings: saving and attaching Excel spreadsheets to emails was neither secure nor error-free, the import process was inflexible, and there was no facility for multi-iteration feedback between QC and the field.

For the .NET platform, Cogent started from scratch.  Instead of exchanging Excel attachments by email, CogentQC.NET users now send emails with system-generated links to a secure website, where feedback recipients log in and submit their responses directly online.  The new Web application, running on Microsoft IIS, writes directly to the same Microsoft SQL Server database to which the main application writes, so that feedback is immediately available.  Unlimited feedback iterations are possible, all of which are reportable, and both QC and the field are alerted when they have incoming feedback.  Everything is now contained within the Cogent QC System, except for the emails exchanged between QC and the field.  This new feature of CogentQC.NET has become one of Cogent’s most popular innovations.

Posted by Kaan Etem

That red symbol at the heart of Cogent’s logo is the Greek letter sigma, which is the mathematical symbol for the statistical concept of “standard deviation”.   This is a reminder that statistical methods are central to Cogent QC Systems’ approach to improving the quality control process. In a nutshell, these methods enable quality control professionals to more efficiently identify and correct significant defects in loan production and servicing processes.

Statistical methods have been used in quality control since the 1920’s. In fact, one of the most powerful reports available in Cogent QC Systems, the control chart, was invented by Walter Shewhart, an engineer at Bell Laboratories, in 1924.  Statistical methods were also emphasized by W. Edwards Deming and Joseph Juran, the fathers of modern quality control, who (separately) took these methods to Japan in the 1950’s, contributing to the “Japanese miracle” of manufacturing quality and economic growth in the 1960’s and beyond.

Here’s brief timeline of the history of statistical quality control (and its acronyms): SPC >> TQM >> 6 Sigma

1920’s:  Walter Shewhart (Bell Labs) invents statistical control charts, pioneers methods of SPC (statistical process control)

1950’s:  Deming and Juran bring statistical QC to Japan; Deming coins the acronyms TQM (total quality management) and PDCA (plan-do-check-act)

1960’s-70’s:  Japan’s major corporations implement statistical QC, leading to the “Japanese Miracle”

1981:  Motorola incorporates statistical QC into a new quality management program called 6 Sigma; coins the acronym DMAIC (define-measure-analyze-improve-control)

1980’s-present:  “Quality Revolution” brings statistical QC methods to U.S. manufacturing, health care, and financial services

Since the mid-1990’s, when Cogent pioneered the use of statistical sampling and reporting methods in mortgage quality control, the use of statistics has become recognized as key to efficient and effective process improvement.  And yet, widespread understanding and adoption of robust statistical methods is not complete.  Cogent’s goal is to facilitate this adoption and to design systems that make the job as easy as possible.

Image by Tessa Hunkin 

Fannie Mae’s new Loan Quality Initiative adds a number of new quality control requirements for originators that must be in place by July 1, 2010.  Perhaps the biggest change is the new requirement for all originators to perform pre-funding quality control reviews, in addition to the existing requirements for post-funding and early payment default (EPD) reviews.  For mortgage quality control professionals, this is another step toward what we at Cogent call “Enterprise QC” — an integrated, end-to-end approach that promotes continuous QC monitoring of all loan origination and servicing processes.

Until now, most lenders have had a disjointed and incomplete approach to quality control across the enterprise. Even among lenders that have been doing some form of pre-funding review, the results are often not available to post-funding reviewers, because there is not a common database for sharing the information.  Although many lenders have begun using automated compliance engines (ACE’s), such as those provided by Mavent and ComplianceEase, the loans that are flagged by the ACE for potential compliance errors are not automatically targeted for post-funding reviews. And QC auditors doing reviews of EPD’s, Repurchases and Claim Denials often do not have access to the data from the pre- and post-funding reviews. On the servicing side, many lenders still do not have a formal quality control process in place, and those that do often do not have access to data from other servicing department audits, let alone audits of originations.

We believe the keys to successful Enterprise QC are: (1) the ability to easily access and manipulate the production and servicing data that are needed to accurately define the populations and select the loans that qualify for each quality control audit, (2) continuous communication between quality control managers and the managers of the processes being audited to ensure that audit checklists always reflect the most current policies and procedures; (3) closed loops for reporting, feedback and response, to ensure that adverse findings are responded to and corrective actions are implemented and documented; and (4) sharing of all quality control data across the enterprise, to maximize the returns from the risk information generated from each QC process.