Services
Mortgage Due Diligence
Quality Control and Audit – Certainly, as a third-party review firm specializing in mortgage due diligence,
We offer a dedicated service for Non-Performing “Distressed” Asset Review (NPL)
Contact us today to learn more about our customized solutions that enhance patient care, improve efficiency, and ensure regulatory compliance.
Non-Performing “Distressed” Asset Review (NPL).
Portfolio Assessment
Comprehensive evaluation of non-performing loan portfolios to assess the overall quality, composition, and risk profile.
Analysis of loan characteristics, including delinquency status, loan-to-value ratios, and borrower demographics.
Loan File Review
Thorough examination of individual loan files to identify key issues contributing to non-performance.
Review of loan documentation, payment history, and borrower communications to assess compliance and documentation quality.
Collateral Valuation
Appraisal of collateral properties to determine current market value and assess potential recovery prospects.
Analysis of property condition, location, and market trends to estimate collateral risk and value preservation strategies.
Loss Severity Analysis
Estimation of potential loss severity for non-performing loans based on collateral values, foreclosure timelines, and recovery expectations.
Calculation of loss reserves and provisioning requirements to support risk management and financial reporting.
Default Reason Analysis
Investigation into the root causes of loan default, including borrower hardship, economic factors, and underwriting deficiencies.
Identification of patterns or trends in default reasons to inform loss mitigation strategies and portfolio management decisions
Regulatory Compliance Review
Assessment of non-performing loan servicing practices and foreclosure procedures to ensure compliance with regulatory requirements and investor guidelines.
Review of loss mitigation efforts and borrower communications to verify adherence to consumer protection laws and regulatory mandates.
Investor Reporting Support
Preparation of detailed reports and presentations summarizing findings from the non-performing asset review process.
Assistance with investor reporting requirements, including data analytics, risk assessments, and performance metrics tracking.
Payment History and Collection comments Review
Validate the accuracy and completeness of borrower payment histories, including tracking payment dates, amounts, and any instances of delinquency or default.
Trained reviewers carefully analyze the collection comments to gain insights into the borrower’s financial circumstances, reasons for delinquency, and responses to collection efforts. They assess the accuracy, completeness, and consistency of the collection comments, looking for patterns, trends, and areas of concern.
Performing/Re-Performing Asset Review (RPL)
Portfolio Analysis and Assessment
Conduct comprehensive reviews of mortgage portfolios to assess the performance, quality, and risk associated with individual loans and the overall portfolio.
Payment History Verification
Validate the accuracy and completeness of borrower payment histories, including tracking payment dates, amounts, and any instances of delinquency or default.
Loan File Audits
Review loan documentation and underwriting files to ensure compliance with regulatory requirements, investor guidelines, and internal policies.
Collateral Valuation and Due Diligence
Evaluate the value and condition of collateral properties securing mortgage loans, including appraisal reviews, property inspections, and title searches.
Credit Risk Analysis
Assess the credit risk of mortgage borrowers based on factors such as credit scores, debt-to-income ratios, employment history, and asset verification.
Loss Mitigation Evaluation
Evaluate loss mitigation strategies and foreclosure alternatives implemented by mortgage servicers to mitigate losses and assist borrowers facing financial hardship.
Regulatory Compliance Review
Ensure compliance with applicable regulatory requirements, including consumer protection laws (e.g., RESPA, TILA), mortgage servicing rules (e.g., CFPB regulations), and investor reporting standards.
Data Analytics and Reporting
Utilize advanced data analytics tools and techniques to analyze mortgage loan data, identify trends, patterns, and outliers, and generate comprehensive reports for stakeholders.
Quality Assurance and Peer Review
Implement quality assurance procedures to validate the accuracy and reliability of review findings, conduct peer reviews and internal audits to ensure consistency and adherence to best practices.
Compliance Only Review
Regulatory Compliance Audits
Our team conducts detailed audits of mortgage loans to assess compliance with relevant laws, regulations, and industry standards, including but not limited to the Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), Home Mortgage Disclosure Act (HMDA), Fair Housing Act (FHA), and Consumer Financial Protection Bureau (CFPB) regulations. Our expert team audit loans to determine whether loans comply with all federal, state, county, and local statutes.
Training and Education
We offer customized training programs and educational workshops to empower your team with the knowledge and skills necessary to navigate complex regulatory environments confidently. Our training sessions cover topics such as regulatory updates, compliance requirements, and best practices for mortgage professionals.
Policy and Procedure Reviews
We review and evaluate existing policies, procedures, and internal controls to ensure alignment with regulatory requirements and industry best practices. We provide recommendations for enhancements or updates to mitigate compliance risk effectively.
Documentation and Recordkeeping Analysis
Our experts scrutinize documentation and recordkeeping practices to verify the accuracy, completeness, and integrity of compliance-related records. We identify areas for improvement and assist in implementing robust documentation management processes.
Risk Assessment and Mitigation Strategies
We conduct comprehensive risk assessments to identify potential compliance risks and vulnerabilities within mortgage operations. Based on our findings, we develop tailored risk mitigation strategies to strengthen controls and minimize exposure to regulatory violations.
Credit and Collateral Review
When conducting a credit review of a borrower, whether for a mortgage loan or any other type of credit facility, it’s crucial to gather comprehensive information to assess the borrower’s creditworthiness.
Here’s an overview of the steps typically involved in a credit review process.
Credit Report Retrieval
Obtain the borrower’s credit report from one or more of the major credit bureaus (Equifax, Experian, TransUnion). Review the report to examine the borrower’s credit history, including payment history, outstanding debts, credit utilization, and any derogatory marks such as late payments or defaults.
Payment History Analysis
Analyze the borrower’s payment history to assess their track record of making timely payments on existing credit accounts, including credit cards, loans, and mortgages. Delinquent payments, collections, or charge-offs may indicate financial distress or inability to manage debt responsibly.
Debt-to-Income Ratio Calculation
Calculate the borrower’s debt-to-income (DTI) ratio, which compares their total monthly debt payments to their gross monthly income. A high DTI ratio suggests that the borrower may have difficulty repaying additional debt obligations and could be at risk of default.
Credit Score Evaluation
Review the borrower’s credit score, which is a numerical representation of their creditworthiness based on the information in their credit report. Credit scores range from 300 to 850, with higher scores indicating lower credit risk. Consider factors contributing to the credit score, such as payment history, credit utilization, length of credit history, and credit mix.
Income and Employment
Verify the borrower’s income and employment status through pay stubs, tax returns, W-2 forms, or employment verification letters. Stable income and employment increase the borrower’s ability to repay the loan and reduce credit risk.
Asset Verification
Assess the borrower’s assets, including savings, investments, and real estate holdings, to determine their financial stability and ability to cover down payment, closing costs, and reserves.
Credit Policy Compliance
Ensure that the borrower meets the lender’s credit policies and underwriting guidelines, including minimum credit score requirements, maximum DTI ratios, and acceptable credit history standards.
Property Inspection
Conduct a physical inspection of the property to assess its condition, including the structure, interior, exterior, and any improvements. Look for signs of damage, wear and tear, or structural issues that may affect the property’s value or marketability.
Appraisal Review
Obtain a professional appraisal of the property to determine its fair market value. Review the appraisal report to ensure that it complies with industry standards and provides an accurate valuation based on comparable sales, market trends, and property condition.
Title Examination
Conduct a title search to verify the property’s ownership status and identify any encumbrances, liens, or easements that may affect the lender’s lien position or the borrower’s ownership rights. Review the title report to ensure clear title and address any issues that may arise.
MSR Loan Review
Reviewing Mortgage Servicing Rights (MSR) involves assessing the value and performance of the rights associated with servicing mortgage loans on behalf of investors.
Before onboarding Mortgage Servicing Rights (MSR) through flow or bulk purchases, conducting due diligence on all or a portion of the files is crucial to assess the associated risk factors.
Our MSR loan review includes:
Data Collection
Obtain comprehensive data on the MSR portfolio, including loan-level information, servicing agreements, investor guidelines, financial statements, and servicing performance metrics.
Servicing Agreement Analysis
Review servicing agreements between the servicer and investors to understand the terms, rights, and obligations associated with servicing the mortgage loans. Evaluate compliance with contractual agreements, including servicing standards, fee structures, and performance metrics.
Loan-Level Analysis
Conduct a detailed analysis of individual mortgage loans within the MSR portfolio. Review loan characteristics such as loan type, interest rate, maturity, loan-to-value ratio, borrower credit profile, and payment history.
Cash Flow Analysis
Evaluate the cash flows generated by servicing activities, including servicing fees, late fees, ancillary income, and expenses. Assess the stability and predictability of cash flows over time, considering factors such as prepayment risk, default risk, and interest rate fluctuations.
Valuation Modeling
Utilize valuation models and methodologies to estimate the fair value of the MSR portfolio. Consider factors such as the net present value of future cash flows, servicing fees, amortization schedules, prepayment speeds, and discount rates.
Regulatory Compliance Review
Ensure compliance with regulatory requirements governing the servicing of mortgage loans, including Consumer Financial Protection Bureau (CFPB) regulations, investor guidelines, and industry best practices. Assess adherence to consumer protection laws, loss mitigation requirements, and foreclosure procedures.
Performance Benchmarking
Compare the performance of the MSR portfolio against industry benchmarks and peer groups. Evaluate key performance indicators such as delinquency rates, foreclosure rates, loss mitigation outcomes, and customer satisfaction scores.
Risk Assessment
Identify and assess risks associated with MSR ownership, including interest rate risk, credit risk, prepayment risk, liquidity risk, and operational risk. Evaluate the impact of macroeconomic factors, regulatory changes, and market conditions on MSR valuation and performance.
Quality Control and Audit
Implement quality control procedures and internal audit processes to ensure the accuracy, reliability, and integrity of MSR valuation and reporting. Conduct periodic reviews and reconciliations to identify errors, discrepancies, or exceptions requiring resolution.
Documentation and Reporting
Document the results of the MSR loan review process, including findings, analysis, and recommendations. Prepare reports and summaries for internal management, investors, regulatory agencies, and auditors.