Following Audit Exceptions

I wanted to see what others do regarding the following of audit exceptions such as: recording of deeds, receiving final title policy, recording of UCCs. We seem to run into many exceptions that continue for months due to the recording offices. The corrective action report grows and grows exponentially with these "stale" exceptions.

Do you continue to show them as outstanding, or do you move them to separate report?

In our Quality Control environment, we do not consider the recorded mortgage, final title policy, etc., "trailing documents", as exceptions, if the proper procedures are in place to: identify the loans where they are missing, there is a monitoring system in place and that there is a departmental follow-up after a period of time.

When QC was first in place, these had been written up as exceptions, but we quickly realized that we were only cluttering up the report with useless information. We do check the follow-up though, and there have been no exceptions.

One way to handle those items that are out for recording is to enter them into your tracking but run the report in a fashion that excludes anything within a recent time period, tied to the normal time it takes to receive the recorded document. In my area, it takes many months right now to receive a recorded mortgage back. That way you are tracking but not showing as an exception until it reaches the predetermined time to be considered a true exception.

That way, you are tracking what is out for recording, you are not showing it as an exception prematurely and you avoid having to backtrack or duplicate work.

We developed a monthly a report called “The statues of audit recommendations”. The General Manager of each area should indicate his comments on the statues of audit recommendations i.e. implemented, not implemented, expected date of implementation etc. Senior management is reviewing this report. This approach is very effective in getting actions.

Just to add a bit to my initial post. While we ignore the trailing docs in the original audit (as mentioned above), we perform a review of the follow-up procedures to ensure they're all accounted for. We consider these as 2 separate steps, knowing there are documents that will not be part of the initial post-closing review and following-up on all missing documents.

While it's an additional review, functionally they are 2 processes, and we did not want to get the work confused, nor have exceptions due to conditions external to our process.