Mortgage banking companies that outsourced their quality-control operations last year experienced the most problems with data-related issues, according to new research from Agoura Hills, Calif.-based Interthinx.
According to Interthinx, 40.9% of its quality-control findings for 2011 relate to missing documentation or data integrity issues, while eligibility and credit issues accounted for only 18.3% of findings. Traditionally, data problems have been among the lesser quality-control problems – between 2006 and 2009, Interthinx determined that missing documentation accounted for 7.1% of all quality-control problems.
‘The shift towards manufacturing defects in 2011 from historical borrower eligibility issues is a significant finding,’ says Jeremy Burcham, director of quality control for Interthinx. ‘Today's borrowers are very well qualified for the most part. However, a well-qualified borrower does not always protect lenders from elevated defect rates or even repurchase issues. The lender's loan manufacturing process needs to be sound in all areas to avoid potential repurchase. A simple breakdown can leave the lender on the hook for a loan that should have been bulletproof.’