10 Challenges You Can Avoid with an Effective Mortgage Post-Close Audit

Why You Should Consider a Comprehensive Mortgage Audit After Closing

A post-closing audit demands precision, accuracy and meticulous attention to detail. You could choose to conduct these audits with the help of your in-house team or outsource to a trusted partner like Aritas who can provide a dedicated team of skilled professionals for you.

Here are 10 reasons why a post-closing audit is necessary for smooth mortgage processing:

1. Regulatory Compliance: Mortgage lending is heavily regulated at both the federal and state levels. Non-compliance can lead to substantial fines and penalties. Conducting a post-closing audit ensures that all regulatory requirements have been met, providing assurance to regulators and protecting lenders like you from legal consequences.
2. Investor Satisfaction: Mortgage loans are often sold to investors in the secondary market. These investors have specific guidelines and requirements that must be adhered to. A post-closing audit verifies that loans meet these criteria, ensuring investor satisfaction and reducing the risk of loan repurchases.
3. Risk Mitigation: The mortgage industry is exposed to various risks, including credit, operational and compliance risks. A post-closing audit helps identify and address any potential issues that could lead to financial losses or damaged reputation.
4. Quality Control: Maintaining a high level of quality control is crucial for lenders. An error-free post-closing audit reflects positively on the lender’s internal processes and their commitment to delivering high-quality loans to borrowers. At Aritas, our independent yet centralized QA team ensures that quality is never compromised
5. Client Confidence: Borrowers place immense trust in lenders when applying for a mortgage loan. Knowing that their loan has undergone a rigorous post-closing audit instills confidence in the borrower and demonstrates the lender’s commitment to transparency and fairness.
6. Preventing Repurchase Requests: Mortgage investors may request that lenders repurchase loans that do not meet their criteria. An error-free post-closing audit helps you avoid these costly repurchase requests, preserving your financial stability.
7. Operational Efficiency: An accurate and well-packaged post-closing audit simplifies the loan file review process. It enables a lender to quickly assess the loan’s compliance status and efficiently take any necessary actions.
8. Data Accuracy: Precision in packaging and delivering the post-closing audit findings is essential to ensure that the results are accurate and reliable. Errors or omissions in the audit documentation can lead to misunderstandings and misinterpretations.
9. Legal Protection: In case of disputes or legal challenges, an error-free post-closing audit provides a strong defense. It serves as concrete evidence that the lender has followed all necessary procedures and adhered to applicable laws and regulations.
10. Industry Reputation: A lender’s reputation in the mortgage industry is invaluable. An error-free post-closing audit contributes to a positive reputation and fosters trust among industry stakeholders, including borrowers, investors, regulators and other lenders.