Important changes took effect on Nov. 1, 2021, impacting your Post Close QC. Here is a summary of the changes and how your audits will be affected:
Conventional Loan Audits: Collateral Risk Assessments Replace Field Reviews
Fannie and Freddie have waived the requirement to obtain Appraisal Field Reviews on 10% of the conventional loan sample. Lenders must now complete a Collateral Risk Assessment on all loans with an appraisal selected within the random QC sample as noted in the updated selling guide as well as in SEL-2021-04. Fannie Mae has provided Collateral Risk Assessment Form 1033 as a robust framework to outline review expectations.
On November 1st, Credit Plus | UniversalCIS began completing Form 1033 on your behalf and uploading it to the QC system along with all other loan level reporting and analysis. Deficiencies will be documented via our standard defect reporting.
FHA Loan Audits: Field Reviews Greatly Reduced
HUD modified their Property and Appraisal QC Review requirements in Mortgagee Letter 2021-17. While the desk review process remains intact, the Field Review requirements were edited. Mortgagees are no longer required to order Field Review Appraisals on all loans contained within the Early Payment Default (EPD) sample.
Rather, the Mortgagee must obtain appraisal field reviews on at least 10% of all FHA-insured mortgages selected for QC review within a given month. There are specific minimums by project type outlined in the Mortgagee Letter and our Policy and Procedures have been updated to follow these requirements.
Given the added analysis required to complete the Collateral Risk Assessment, a new transactional fee will be assessed moving forward. This fee will only be applicable to conventional loans subject to the Collateral Risk Assessment. Overall, we do not anticipate an increase to your bottom line invoice total given the significant reduction in appraisal field reviews. Formal pricing notifications are forthcoming.