Introduction to Mortgage Origination Examinations Training eBook

Internal Use Only

Exceptions were approved on 325 loans during the exam scope period; this represents 58% of the total closed loan volume for the participating states. Exceptions are approved by underwriting managers and upper-level management. An Underwriting Exception report was provided to the examiners detailing the exception category, exception details, and any compensating factors. Eighteen percent (18%) of the exceptions failed to include exception details, and the required compensating factors were not identified on most of the loan files. The Company measures underwriting quality through its pre-funding, post-closing, and securitization reports. The examiners recommend that the Company ensure all exception details are reported and include all compensating factors warranting the exception.

Internal Use Only

The Appraisal Independence Requirements Policy contains a contradiction in who can select, retain, and provide compensation to the appraiser. On page one in the Scope of the policy, it states that the Company and its wholly owned subsidiary appraisal management company (AMC) is solely responsible for selecting, retaining, and compensating appraisers. On page two of the policy, it states that “Only third parties specifically authorized by the Company (including, but not limited to, appraisal companies, appraisal management companies, and Correspondent Lenders) shall be responsible for selecting, retaining, and providing payment of all compensation to the appraiser. Further on page two, the policy states “To this end, the Company uses its AMC to select, retain, and compensate its licensed fee appraisers.” The Initial Information Request completed by the Company states that it also utilizes Pro Appraisal Plus and AMC as an appraisal management company that maintains their own panel of licensed and certified appraisals. Pro Appraisal Plus is not mentioned in the Appraisal Independence Requirement Policy Requirement(s).