Good Afternoon,

In the past, each quarter I have selected a sample of mortgage loans to review that were oringinated in the previous quarter. An issue arised that I would be noting certain exception trends two quarters in a row because of the timing of the reviews. Now I have switched to revieing them monthly so that I can communicate with mangement and the loan officers and identify exceptions earlier. However, I am noting that I almost always I will note that a recorded mortgage and the final title policy have not yet been received. How can I work around this? These are two important pieces of the review and I am not comfortable with continually reviewing loans without these documents. Do I need to change my approach? How so? Any thoughts or suggustions would be great.

Thanks!

Are these outstanding items being tracked by loan ops? If so, then I'd say that's the key to your audit - they don't necessarily have to be there in the file(since it can take a while to get a recorded mortgage), but the key is will someone know if they never come.

My first question would be why are you reviewing mortgage loans each month or each quarter. Secondly, if the items are being properly tracked this may resolve your exception issue. We take the approach, if a loan document exception is being properly tracked it is not an exception. We then review the exception report for old items.

We review mortgage loan files monthly, thus resulting in having to wait for the Final Title Policy to be recieved. This requires us to follow up with the Mortgage department for the final docs, but allows us to spot trends each month and identify any issues from the prior month without them going a full quarter un-noticed.

Thanks everyone for your comments. Sounds like follow-up is the key here.

@oscupa--We sell loans to Freddie Mac and and 10% sample is required to be reviewed each quarter. In conjunction with those reviews I perform on Freddie Mac loans, I also sample loans we retain in-house. We find it useful to spot trends as @BabyB mentioned, especially with RESPA. The reviews are quite comprehenzie. If I waited and did targeted audits of specific areas, the number of loans is small enough, I would likely be sampling the same loans for each test anyway.