Cogent QC: Award-Winning Loan Quality Control & Compliance Software

Award-Winning Mortgage Quality Control and Compliance Software

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Secondary Review Options in Cogent QC Systems

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In the most recent issue of American Banker, the CEO of Cape Cod Savings had this to say about the burden of regulatory compliance:

“…Because of HMDA and RESPA, we have checkers who check the checkers. Then we actually have another third layer of checkers who check the checkers who check the checkers. Then we have two outside consulting firms that check again.” 

recheckSound familiar?  All too familiar for some Cogent clients, who have multiple layers of QC and compliance operations – often at the corporate level, at the business unit level, and on an outsourced basis.  And they invest so much in quality control and compliance because the alternative is painful.  To cite just one instance, the Mortgage Bankers Association (MBA) sent this around last week:

“CFPB Assesses Civil Money Penalties For HDMA Data Errors
The CFPB has announced that it assessed civil money penalties against Mortgage Master, Inc., a non-bank, and Washington Federal, a bank, after examinations identified significant data errors in mortgage loans reported pursuant to the Home Mortgage Disclosure Act (HMDA). CFPB followed the announcement with a bulletin outlining the elements of an effective HMDA compliance management system and the resubmission thresholds, as well as other factors that the Bureau uses to determine if they will pursue a public HMDA enforcement action and associated civil penalties.”

Among other things, that bulletin states that “effective HMDA compliance management systems frequently include … comprehensive and regular internal, pre-submission HMDA audits.”

Aside from under-scoring the sheer scope of today’s regulatory compliance requirements, this reality also highlights the need for efficiency in performing secondary and tertiary audit reviews.  This is why Cogent has been introducing more extensive secondary audit review options.  The latest Supervisor Override functionality was covered in our recent ‘Version 4 Overview’ webinar (clients may contact support@cogentqc.com for a link to the recording.)  With that, the possibilities now include:

  • Revert a completed loan audit and make changes to the original loan audit.
  • Use Supervisor Review to conduct a parallel supervisor audit, while preserving the original auditor’s work as the official audit of record.
  • Use Supervisor Override to override individual findings, thereby modifying the official audit of record but preserving a record of the original auditor’s findings.

These different approaches can be combined with appropriate pending and completion of loan reviews to tailor different secondary reviews to different situations.  When all eyes are on you, it’s always good to have options.

Categorize Audit Questions for Streamlined Reporting of Regulatory Data

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loan audit or regulatory categorySometimes it makes sense to organize audit questions by regulation.  Compliance audits are often organized this way, with names of regulations comprising audit category names and audit questions clustering within those categories.  This organization can be reinforced by audit category codes such as TIL, ECOA, CLA, FCRA and so on (hence, question number ‘TIL-012a’).  This approach makes it quick and easy to report on regulation-specific audits using Cogent.

But frequently, audit questions are organized by category of defect, such as Assets, Credit, Liabilities, and Income.  Traditional post-closing audits continue to be organized this way, as confirmed by FNMA recently (see recent blog post) In such a case, how do you report on specific regulations when a regulator comes in for an audit?  The answer is via Categories.

Cogent’s loan audit software allows any audit question to be tagged with one or more Categories.  Standard Categories include ‘area tested’, ‘regulation’, and ‘federal/state’.  Additional Categories may also be created.  With Category tagging, it is a simple matter to include in a report only those audit questions that are relevant to a regulatory audit.  Access Category tables via your system’s Audit Lookup Table Manager under Administrator Tools.

Cogent Clients Feature Among Fannie Mae STAR Servicers

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starFannie Mae has just revealed its Servicer Total Achievement and Rewards list (STAR), profiling the servicers who rank high when tested on customer service and other key metrics.  Four of the seven top-ranked servicers are Cogent clients, which means that either Cogent is in good company or vice versa!  Either way, it’s validation of Cogent’s focus on best practices in the increasingly important servicing quality control function.

The top-ranked servicers include: Green Tree Servicing, Nationstar Mortgage, Ocwen Financial Corporation, PHH Mortgage Corporation, PNC Financial Services Group, Inc., Seterus, Inc., and Wells Fargo Bank.

Among other sources, Housing Wire cites the news at https://www.housingwire.com/articles/26473-fannie-mae-ranks-top-servicers, where you’ll find more info and links.