Where in your bank is the Fannie QC function? What type of qualifications/background did your institution require that person to have?

We outsource this function to a Third Party. I believe the HUD Guidelines says it must be done independently.

In our shop we have an individual that reports to the Loan Processing Manager complete our Fannie QC. This person has no responsibilities for producing loan documentation.

Our senior internal auditor completes -- he has 7 years of mortgage processing/underwriting/closing experience, followed by 12 years of auditing. I've always felt someone with mortgage underwriting experience needs to be doing these QC reviews.

Might want to review this:

https://www.fanniemae.com/content/tool/qc-self-assessment-worksheet.pdf

Thank you, Randy! Yes, we've read through that thoroughly numerous times the last couple of years. They've been using a 3rd party, and since they'll be selling direct to Fannie now, they are considering putting it in the Compliance Dept. I'm not completely opposed to that - I just don't know if that's the best place for it since none of us have worked directly in secondary before. Most every where else I've been or talked with, this function is either in Audit, or an independent person in the secondary dept with extensive experience handled just that. Our volume doesn't warrant a full-time person just for that. This is why I was curious as to where others have it.

Much of this depends on how your compliance department is structured and what are their responsibilities. If the compliance department is just a line department with actual operational responsibilities, then it might be OK. If compliance is considered a management function in charge of guiding the organization in a manner it remain compliant, then placing operational functions into the department undermines that objective. Some compliance departments are directly in charge of HMDA filings, QC functions, BSA/AML monitoring and filings, etc.. I find placing operational responsibilities directly into the compliance department undermines the effectiveness of the compliance department, if they have been designed to act as a management function. It becomes like auditing yourself, you lose your perspective when you become responsible for the day-to-day activities.