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D1-3-03, Lender Post-Closing Quality Control Review of Data Integrity (04/03/2019)

Introduction
This topic contains information on the lender's post-closing QC review of data integrity, including:

Verification of Data Integrity

The lender must review the final terms of the loan to ensure they align with data on which the underwriting was based. When a lender’s loan file review identifies discrepancies between the data that was used in the underwriting decision and the data verified through the QC process, the lender must reassess the underwriting decision based on the newly verified information to determine whether the loan remains eligible as delivered to Fannie Mae.

For mortgages processed through DU, the lender must ensure that all data submitted to DU is true, correct, and complete. The lender must verify that the loan file contains documentation that supports all data submitted to DU to process the mortgage loan. The lender must ensure that all of the borrower’s liabilities were included in DU’s analysis.

When there are inconsistencies between the data and/or information submitted to DU (or used for manual underwriting) and the source documents, the lender must

Step Description
1

Determine whether discrepancies are within the tolerances permitted by this Guide (see B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit ReportB3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report, and B3-6-02, Debt-to-Income RatiosB3-6-02, Debt-to-Income Ratios).
2

For loans underwritten through DU, if discrepancies are outside the DU allowed tolerances, resubmit the mortgage loan to DU using the correct data. If the lender is unable to resubmit the loan to DU, the lender must manually perform a comprehensive risk assessment using the documentation required by DU, to determine if the loan meets the Selling Guide requirements for manually underwritten loans. The DU limited waiver of representations and warranties is invalidated when loans that exceed DU tolerances are not resubmitted to DU. For additional information, see B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit ReportB3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report.

Note: DU-only products are not eligible for a manual comprehensive risk assessment.

For manually underwritten loans, if discrepancies are outside of the allowed tolerances, the lender must manually perform a comprehensive risk assessment to determine if the loan meets Selling Guide requirements. For additional information, see B3-6-02, Debt-to-Income RatiosB3-6-02, Debt-to-Income Ratios.
3

Make a determination as to whether or not the loan, with the correct data taken into consideration, remains eligible as delivered to Fannie Mae, either through the receipt of a DU recommendation of Approve/Eligible, or through manually underwriting the loan, if appropriate.
4

If the lender determines that the mortgage loan was eligible as delivered, the lender must document the underwriting file to reflect its decision.
5

If the lender determines that the mortgage loan was not eligible as delivered, the lender must advise Fannie Mae of these findings using the self-report functionality in Loan Quality Connect. For additional information, see D1-3-06, Lender Post-Closing Quality Control Reporting, Record Retention, and AuditD1-3-06, Lender Post-Closing Quality Control Reporting, Record Retention, and Audit.

Review of Potential Red Flag and Alert Messages

The lender’s loan file review process must include a review of any “potential red flag” messages appearing in the DU Underwriting Findings report or alerts created by sources other than DU, such as those associated with credit reports or Social Security verification systems, to ensure that all messages have been addressed and documented, and that the mortgage loan is eligible as delivered to Fannie Mae.

Review of Social Security Number

As part of the lender’s loan file review process, the lender must ensure that the borrower(s)’ Social Security number on loans selected for review is consistent in all file documentation and any requirements for validation of the Social Security number were satisfied prior to closing. For additional information, see B2-2-01, General Borrower Eligibility RequirementsB2-2-01, General Borrower Eligibility Requirements.

Recent Related Announcements

The table below provides references to recently issued Announcements that are related to this topic.

Announcement Issue Date
Announcement SEL-2019-03 April 03, 2019

 

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