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

Automating Workflows

March 29, 2018 By Kaan Etem

The mortgage QC sector has evolved to the point where most system providers automate the basic workflows in one way or another: import loan record data, sample loans, conduct audits, reverify documentation, send feedback to business units in the field, resolve findings, and generate reports.

These aspects of the quality control process are well-honed and mature, so it’s comparatively easy to build systems and interfaces to manage them. The question is, what happens when you introduce different workflows, new workflows, or even new audit types?

Cogent’s system architecture, development staff and business model are aligned around helping lenders customize and automate their workflows and integrate them with other workflows in the organization.

If you’d like to hear about how we’ve helped our clients automate their processes, call us or email us at the coordinates at the top of the page. We’re happy to share.

Cogent Selected for HW Tech100 List of Most Innovative Technology Companies

March 3, 2015 By Kaan Etem

Cogent is pleased to announce that we have been selected by Housing Wire for its 2015 HW Tech100 list of the most innovative technology companies in the housing economy. Over 250 nominations were received by the judges, who whittled the list down to the select 100. Of that 100, 60 were returning winners from last year and 40, including Cogent, were new inductees. We are honored to be included in such impressive company. As always, we will seek to continuously improve our technology in collaboration with our clients.

Here is how Housing Wire describes the HW Tech100:

New Mortgage Servicing Rules Take Effect

January 13, 2014 By Kaan Etem

The new mortgage servicing rules that the CFPB finalized in January 2013 became effective January 10, 2014, affecting the Truth in Lending Act (TILA) under Regulation Z and the Real Estate Settlement Procedures Act (RESPA) under Regulation X.

The amendments are intended to provide borrowers with detailed information regarding their loans, ensure that mortgage servicers do not unexpectedly assess borrowers with charges and fees, and ensure that borrowers are informed of alternatives to avoid foreclosure. The final rules should also provide borrowers with more timely and accurate responses to their complaints by requiring servicers to follow certain error resolution procedures.

As a servicing QC and compliance professional, you have already been preparing for the additional information and data tracking requirements, as well as the process changes. With luck, your auditors are trained and ready. And your software has been updated and tested to reflect the changes.

If you’re a Cogent client, this means you have updated your audit questions and implemented the appropriate question trigger rules. Maybe you’ve introduced additional findings options and workflow updates and configuration tweaks. Alternatively, you may be puzzling through how to put the pieces together most efficiently. If so, let us know at info@cogentqc.com. We are here to help.

Lenders’ Dilemma: Invest in Tech or Exit Mortgage Business

October 28, 2013 By Kaan Etem

Here’s a timely article (registration required) highlighting how the new regulatory environment for lenders is forcing a stark choice: either invest in technology to streamline and automate loan origination and servicing processes – or exit the business.

Some choice excerpts:

“Origination costs are expected to rise 11% this year from a year ago, to nearly $5,900 per loan, as lenders scramble to meet tough new requirements from the Consumer Financial Protection Bureau, the Federal Housing Administration and Fannie Mae and Freddie Mac that take effect in January.”

“Large banks can justify investments in technology and can hire more staff because they spread the costs across more loans. But small banks with fewer than 100 employees may only have a handful of employees doing the work, which means relying even more on technology…”

“…921 compliance changes [have been documented] from various agencies since the housing market crashed in 2008. Particularly challenging for small lenders are new requirements from Fannie and Freddie that require lenders to deliver loans with as few defects as possible.”

“The government-sponsored enterprises are now electronically validating 100% of the loans they purchase as part of a broader initiative to improve loan quality. The Federal Housing Administration has proposed similar changes and may set a maximum threshold for the percent of loans it will allow to have defects.”

“Survival is dependent on improving quality control standards otherwise [lenders] won’t be able to compete or to sell loans that the GSEs will be willing to buy,” says Craig Focardi, CEB TowerGroup’s senior research director.”

“Everybody is extremely nervous because if you don’t dot your i’s and cross your t’s in compliance, you’re going to get a lot of repurchases and will be out of business. Everything in a loan file has to follow the letter of the law.”

“Many lenders don’t want to invest in the labor and technology that it takes for [quality control] and compliance,” says [Annemaria Allen, president and CEO of The Compliance Group in Carlsbad, Calif.], noting that such requirements have never really been enforced to the degree that they are now. “You have to be able to slice the data and we know that business units are screaming about this. But if you’re going to sell to Fannie and Freddie and you do a [lousy] job…they will be in your house nonstop and make sure you have the processes in place and embrace quality.”

Forewarned is forearmed. It’s a very different industry now than it was in 2007.

Cogent Quality Trend Reports Demystified – Infographic

October 23, 2013 By Kaan Etem

Cogent QC Systems ship with numerous standard reports, organized by category. Loan Status reports help managers to track the progress of audit activities; Audit Findings reports show audit findings from various perspectives, from granular detail to summary overview, but always for a particular period; and Feedback and Letter reports are designed to track specific audit activities.

In contrast, most Management reports show quality trends across multiple periods for specific sample groups (such as the Statistical Sample or the Stratified Sample, each of which have specific definitions in Cogent.) In addition, and perhaps most importantly, Cogent’s Quality Trend reports show quality levels for particular sample periods and specify the precision with which these may be inferred to the population.

It’s one thing to report the audit results of a selection of loans sampled from a population of loans (“we found 2 defective loans out of the 30 we audited, for a defect rate of 6.7%”); it’s another thing to make inferences, based on the results of the sample, to the population as a whole (“we are 95% confident that the population from which we sampled has a defect rate of 6.7%, plus or minus 2%.) In order to make valid statements like this, sampling and auditing and reporting must be controlled to eliminate bias and maintain statistical integrity. Cogent QC Systems do this for you automatically (while providing leeway to separately do non-random, non-statistical sampling.) The results are presented in Cogent Quality Trend Reports.

Since most clients do not live the dream of statistical analysis on a daily basis, like we do at Cogent, it’s possible that statistical terminology is not top of mind. So we have created this infographic to help with the interpretation of Cogent’s Quality Trend Reports (click on the image for a larger version). Please pass the link around among users of Cogent in your organization. We welcome insights and feedback at support@cogentqc.com.