Uncategorized Archives - Page 8 of 14 - Cogent QC: Award-Winning Loan Quality Control & Compliance Software

Fannie Mae releases new list of Loan Defect Categories

September 25, 2013 By Kaan Etem

In case you missed it, Fannie Mae released its new list of Loan Defect Categories on August 27, 2013.

Says Fannie, “The list shows the loan defects, by categories, identified by Fannie Mae in post-purchase review of our acquisitions. These defects (which may be eligibility violations) are referenced in reporting to lenders on the quality of their deliveries.”

So if you are setting up or overhauling your standard post-closing audit checklist, this is a good generic template to begin with. It covers all of the essential categories of loan QC errors (or of loan quality, to put it another way). If you are using Cogent’s loan audit software, in which these are called audit question categories, all that’s missing is a category and question coding scheme. With that, your reporting possibilities are almost limitless, allowing you to report by defect category or sub-category, by individual audit question, and so on.

Thanks to Fannie for taking another step towards standardizing the scope of loan quality reviews.

CFPB Exam Manual versus War and Peace

August 22, 2013 By James Robinson

In a recent Housing Wire article, Megan Hopkins reported on the CFPB’s update of its exam procedures, and at the end of the article is a link to the new update for RESPA. Amazingly, the update for RESPA alone is an 82 page document!

Wow, I thought, this is a lot for a Compliance department to read and incorporate into its audit processes – and it’s only for RESPA. I wonder how lengthy the entire manual is?

Well, the October 2012 Version 2 of the CFPB Supervision and Examination Manual is a whopping 924 pages!

And that doesn’t include the subsequent updates for Debt Collection (29 pages), Education Loans (27 pages), ECOA (48 pages), TILA (213 pages), more ECOA (18 pages) and RESPA (82 pages).

So far, a total of 1,341 pages!

While it’s not quite as long as War and Peace (1,440 pages) yet, it probably will be after a couple more updates.

Happy reading, compliance professionals!

Cogent Releases Version 4.0

May 15, 2013 By Kaan Etem

We are pleased to announce that Cogent QC Systems Version 4.0 has been released. Here is the news release and here is the Version 4.0 Feature List, showing all features introduced since the Version 3.0 release.

We’ll be announcing dates for introductory webinars on some of the major new functionality. And as usual, we record all webinars and make them available to clients who cannot make the live sessions.

If you’re wondering when you’ll get access to these features, contact us at support@cogentqc.com.

Happy QC’ing!

Microsoft Excel: Powerful, Easy to Use, and a Bit Dangerous

April 16, 2013 By Kaan Etem

Microsoft Excel is such a powerful, intuitive and familiar software tool that people think of it first whenever they need to work with relatively complex sets of numbers. Combined with Microsoft Word, Excel is frequently the quality control and/or reporting “system” of choice for new or small lenders, or for those who are forced to work with a no-cost solution. But Excel is not a database application, does not accommodate workflows very easily, and is wide open to human error. Among other things, manual cut-and-paste, manual data entry and formula errors can produce wildly incorrect results.

A pair of recent articles highlight the kinds of errors that are common in the worlds of business and finance, and that can lead to disastrous decisions. “The Importance of Excel” talks about the pernicious consequences of even small errors, concluding that “[w]hile all software breaks occasionally, Excel spreadsheets break all the time. But they don’t tell you when they break: they just give you the wrong number.” The second article talks about the dangers of false assumptions, selective data usage, and simple coding error. Both are worthwhile reads, if only to appreciate what actually goes into the models that business and political leaders seize on to validate their points of view.

Any tool is only as good as the fallible human being using it. That’s why savvy managers never take spreadsheets at face value, and why professionals insist on using the right tools for the right job.

Mustaches in Movember

November 9, 2011 By Cogent QC

Mustaches are top of mind in Movember for those hirsute men who wish to do some good with their facial hair. But there are those who go beyond just letting it grow once a year; these are men who have turned the mustache into a cause.

The American Mustache Institute and a noted tax professor have lobbied the IRS and Congress for a tax incentive for Mustached Americans called The STACHE Act Proposal (Stimulus To Allow Critical Hair Expenses). The rationale? “We’ve learned from studies that mustached Americans are earning about 4.3% more on average than the clean-shaven American,” says that noted tax professor, Dr. John Yeutter.

He goes on to say: “Given the clear link between the growing and maintenance of mustaches and incremental income, it appears clear that mustache maintenance costs qualify for and should be considered as a deductible expense related to the production of income under Internal Revenue Code Section 212.” Specifically, the STACHE Act offers incentives for people of Mustached American heritage in the form of a $250 deduction for expenditures for mustache grooming supplies in the determination of Adjusted Gross Income.

Brilliant! To date, our favorite example to illustrate the fallacy of equating correlation with causation has been that of the almost perfect synchronicity between drowning deaths in the US and the consumption of ice cream. While the two march in lockstep, ice cream consumption does not cause drowning nor vice versa. But the American Mustache Institute may have sprouted an even better example. Clearly, the task is now to advise all ambitious men of this newfound competitive advantage. But what of the women?

Posted by Kaan Etem