How to Provide Powerful Post-Closing QC Audit Reports
November 7, 2023
Donna Gibson, Chief Operating Officer and President at QC Ally
Over the past month, I’ve shared strategies to help you streamline your post-closing quality control (QC) review process and identified common misconceptions about discretionary audits. But all of the data collected during the auditing process is, quite frankly, useless without powerful reports to summarize and outline the findings. And those reports are equally meaningless if they aren’t tailored to each specific audience reading the reports (e.g., underwriting, closing, compliance, etc.). With so much to consider, here’s how to deliver powerful, accurate reports to the right stakeholders at the right time.
The “Who” and “What” of Reports
Before doing any major legwork, include all relevant parties right off the bat. This means sitting down with each intended stakeholder (e.g., senior management, your board, investors, QC manager, etc.) to tailor the reports to what matters most to them. Examples could include:
- High-level defect trends for senior management, so they can understand the potential risk within the organization
- Subset defect trend reports and lookbacks for each department manager to pinpoint areas for improvement within their teams’ processes
- Gross and/or Net Defect reports for GSE’s and investors
If you are partnering with a QC vendor to do a lot of this work on your behalf, it’s important to remain an active participant in the process. Also, bad data in means bad data out, so be sure to double-check the accuracy of your vendor’s final product and reports regularly. A good partner will help fix any mistakes or errors made during the audit and reporting process, while others may let the ball fall in your court. You should never have to manually produce a report if you are using a vendor!
If you choose to keep your QC auditing in-house, you are responsible for the final product being produced by your team. And data can be swayed, misleading, or incomplete, so ensure you have the right team in place to manage your auditing process.
No matter if you work with a third party or complete your audits in-house, at the end of the day, only you are held responsible for the relevancy and accuracy of your reports.
The “When”, “Where”, and “How”
As you begin to execute against your defined reporting process, keep in mind that the two reporting milestones – initial reports and final reports – all must be completed within 90 days to adhere with FHA and Fannie Mae guidelines. With this fixed timeframe in mind, it’s critical to publish the initial reports as soon as possible to allow ample time to:
- Review the findings,
- Accept or rebut the findings, and
- Assign the findings out to the field for response and remediation.
If you are using a vendor, you will want to go back to them at this point to have revisions made to the data that is being reported. This will ensure that when your final reports are issued within the 90-day timeframe, that all reported information is correct.
Don’t forget that if you can’t finish your quality control reviews and reporting on time, you will need to self-report to the GSE(s) that you work with.
In conclusion, reporting can – and should – be a powerful tool to help drive many critical decisions within your organization while also showcasing the great work completed by your QC team and vendor if applicable. However, with great power comes great responsibility to ensure the correct information is being provided to the correct person in and outside of your organization. To learn how you can leverage QC Ally’s team of experts, please don’t hesitate to reach out to us: