Comments on: Fewer Lenders and More Auditors Equal Additional HUD Audits http://reversemortgagedaily.com/2010/07/28/fewer-lenders-more-auditors-increased-reverse-mortgage-audits/ Reverse Mortgage News and Information Fri, 10 Feb 2012 19:11:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: billpeters http://reversemortgagedaily.com/2010/07/28/fewer-lenders-more-auditors-increased-reverse-mortgage-audits/comment-page-1/#comment-38589 billpeters Thu, 29 Jul 2010 13:48:00 +0000 http://reversemortgagedaily.com/?p=5385#comment-38589 Many Loan Officers and Processors are under the false impression that if they are working as wholesale brokers submitting their loans to other lenders instead of working for the lender themselves, then the lender is wholly responsible for compliance, especially post-funding.rnrnThat leads to the attitude that a QC review is a second round of underwriting-like documentation that they want to avoid because it interferes with productivity (defined as taking in new loans). The future disappearance of these mis-informed brokers will be a further blow to the broker business model.rnrnA robust QC process is "offensive defense" that helps sustain productivity (defined as staying in business so you can take in new loans). Many Loan Officers and Processors are under the false impression that if they are working as wholesale brokers submitting their loans to other lenders instead of working for the lender themselves, then the lender is wholly responsible for compliance, especially post-funding.rnrnThat leads to the attitude that a QC review is a second round of underwriting-like documentation that they want to avoid because it interferes with productivity (defined as taking in new loans). The future disappearance of these mis-informed brokers will be a further blow to the broker business model.rnrnA robust QC process is “offensive defense” that helps sustain productivity (defined as staying in business so you can take in new loans).

]]> By: billpeters http://reversemortgagedaily.com/2010/07/28/fewer-lenders-more-auditors-increased-reverse-mortgage-audits/comment-page-1/#comment-37905 billpeters Thu, 29 Jul 2010 11:48:39 +0000 http://reversemortgagedaily.com/?p=5385#comment-37905 Many Loan Officers and Processors are under the false impression that if they are working as wholesale brokers submitting their loans to other lenders instead of working for the lender themselves, then the lender is wholly responsible for compliance, especially post-funding.<br><br>That leads to the attitude that a QC review is a second round of underwriting-like documentation that they want to avoid because it interferes with productivity (defined as taking in new loans). The future disappearance of these mis-informed brokers will be a further blow to the broker business model.<br><br>A robust QC process is "offensive defense" that helps sustain productivity (defined as staying in business so you can take in new loans). Many Loan Officers and Processors are under the false impression that if they are working as wholesale brokers submitting their loans to other lenders instead of working for the lender themselves, then the lender is wholly responsible for compliance, especially post-funding.

That leads to the attitude that a QC review is a second round of underwriting-like documentation that they want to avoid because it interferes with productivity (defined as taking in new loans). The future disappearance of these mis-informed brokers will be a further blow to the broker business model.

A robust QC process is “offensive defense” that helps sustain productivity (defined as staying in business so you can take in new loans).

]]> By: James_E_Veale_CPA_MBT http://reversemortgagedaily.com/2010/07/28/fewer-lenders-more-auditors-increased-reverse-mortgage-audits/comment-page-1/#comment-37906 James_E_Veale_CPA_MBT Wed, 28 Jul 2010 20:27:56 +0000 http://reversemortgagedaily.com/?p=5385#comment-37906 I find the remarks of Mr. Slayton most interesting. If one can reasonably isolate HUD auditors from all operations and personnel, Mr. Slayton makes a valid point about the value of an onsite audit. If not, I find this suggestion a very questionable practice. <br><br>Because of our need to have immediate access to client information in an attempt to reduce the cost and time to produce opinions on the audit of financial statements, we were housed onsite while performing field work. More issues and problems were uncovered at the offices of our clients than ever could have occurred if we never entered on client premises. We were trained to look and observe for anything that could be relevant to our audit beyond the documents we requested. Why Mr. Slayton would believe it is otherwise in a HUD audit is very odd.<br><br>While it may only take a week for an auditor to complete an FHA audit of a smaller lender, it is doubtful that the same can be said of the largest lenders. A simple division of the number of lenders by the number of auditors does not result in a reasonable estimate of the number of months between HUD audits. With fewer endorsements, it seems the cycle would be shorter when there are less loans being endorsed. I find the remarks of Mr. Slayton most interesting. If one can reasonably isolate HUD auditors from all operations and personnel, Mr. Slayton makes a valid point about the value of an onsite audit. If not, I find this suggestion a very questionable practice.

Because of our need to have immediate access to client information in an attempt to reduce the cost and time to produce opinions on the audit of financial statements, we were housed onsite while performing field work. More issues and problems were uncovered at the offices of our clients than ever could have occurred if we never entered on client premises. We were trained to look and observe for anything that could be relevant to our audit beyond the documents we requested. Why Mr. Slayton would believe it is otherwise in a HUD audit is very odd.

While it may only take a week for an auditor to complete an FHA audit of a smaller lender, it is doubtful that the same can be said of the largest lenders. A simple division of the number of lenders by the number of auditors does not result in a reasonable estimate of the number of months between HUD audits. With fewer endorsements, it seems the cycle would be shorter when there are less loans being endorsed.

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