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Fannie Mae QC Requirements for Prefunding

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We are trying to update a residential loan policy and our review committee would like to know what would happen if we failed to comply with Fannie Mae QC requirements for prefunding and post-close mortgage loans? I can find info on post-close penalties and requirements, but nothing for not completing prefunding QC. Can you point me to any penalties, or requirements to self-report and/or buy-back loans if we don't do prefund QC?

Failure to have an adequate prefunding QC process is no different than failing to have an adequate post-funding QC process.

Chapter D1-1, Lender Quality Control Process

Lender Quality Control Program

Lenders that fail to maintain an effective QC program will be in breach of their contractual obligations with Fannie Mae.

A2-3.1-01, Lender Breach of Contract

Fannie Mae may terminate the Lender Contract (in its entirety or its individual selling arrangement or servicing arrangement) with cause at any time and immediately, if the lender breaches any provisions of its Lender Contract.

First published on 09/13/2020

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