This is not really a compliance question more procedural. But I was wondering if someone would share with me their loan review procedure. Our loan review person corrects the any errors she finds, I think the errors should be sent back to the loan processors to be corrected. This keeps the loan review person independent. Am I off base with this thinking or does it not really matter.
Thanks for any suggestions you may offer.

IMHO - The reviewer should not be doing any corrections. The reviewer should report findings to management and management should implement corrective actions (if possible or necessary) only after they agree that there is a problem.

Agree with Randy - besides, how will the people making the mistakes learn what the mistakes are unless they correct them.

Agree with Randy- i do loan review and i report findings to management to be resolved.

I report errors, provide information on how to correct the errors, make suggestions for process improvements and recommend policy revisions. When I see a repeated pattern of errors, I recommend training and sometimes participate in the training process.

I also am called up to give front-end guidance on documentation from time to time. My background was in a centralized doc prep unit at two different banks.

IMHO You are not off base at all. I agree with the others here. There has to be a separation of duties in audit/review functions.

1. Who audits/reviews the changes your loan review person made?

2. Errors found in the future will be deemed processing errors when in your case you might now know what happened.

3. How can you comfortable dislose to management, external auditors or government agencies that you do have a separation of duties when that line is being crossed consistently?

4. Where is the accountability if the processor can continually make mistakes without having to re-do anything?

5. What about salaries? Are you paying a review salary for a processing work?

6. How do you write procedures? "If you make a mistake please forward to loan review for correction".

Ditto with what Mint Julep does. I am loan review and that's pretty much what I do.

In a situation where there is an AVP-Secondary Review, with a staff of two scanners, a Post-Closing Specialist, and a Reviewer, would it be appropriate for the Post-Closing Specialist to correct errors that the Reviewer observed? Meaning, if the Reviewer catches that the effective date of a title policy is incorrect, the PC Specialist would contact the title insurance company, instead of having the Reviewer contact the processor and the processor contact the title insurance company? I am in the beginning stages of setting up an entire post-closing process, and I am wondering if this will satisfy the need to keep the Reviewer independent?

Please add notary-certificate reviews with your process. If you need help, there is a free resource that I posted here some time ago, but you can private message me if you need it.

Different size facilities must structure their procedures accordingly. While a large department may be able to maintain strict independence, a smaller one may necessarily have some overlap. imho, the Reviewer is independent because they did not prepare the docs. Whether or not they're actually correcting them or facilitating the correction by having the closer do the correction, they still were not responsible for the actual preparation so I believe they maintain their independence. Of course, proper documentation of finding the error and the correction made must be in the file to track.

eta: Not sure what kind of notary certificate review is being mentioned above. It's not part of my review process here.

Most institutions don't, but they should - See the resource at www.notarypower.com/doc_guide.html

I have audited many an institution with inappropriate notarial certificates on their documents or instructions in their policies ("Take it to a notary and have it notarized") and (worse) when a document receiver doesn't know what a properly executed notarial certificate should look like, and don't know to reject it before a loss is realized.

The Dept of Justice settlement is really the tip of the iceberg. I have been doing this for more than 5 years - and still cant understand why I am retained more for court cases involving banks' notary-employees and not retained as their notary educator. Im much more expensive from the witness box than I am in your classrooms!