First and foremost, you will need to go back at least twelve months, maybe longer, to get servicing quality control to the point that it is acceptable to the GSEs. Ginnie Mae will undoubtedly expect to receive the reports for the twelve months previous to the application’s formal commencement.
The GSEs conduct their own performance tests. They will communicate any performance deficiencies noted to the servicer. But, the GSEs could elect to terminate a servicer’s right to service their mortgage loans, although the servicer will still have an opportunity to explain any mitigating circumstances or factors that justify the servicing actions it took or did not take, given the timeframe specified by the GSEs in their communication of the performance deficiencies.
Servicing quality control is implemented for a variety of reasons, such as complying with insurer and guarantor requirements; proper servicing to private institutional investors; conforming to company policies and procedures; complying with applicable federal, state, and local laws and regulations; complying with HUD FHA guidelines; implementing quality control requirements for various types of loans (i.e., FHA, VA, USDA, conventional); meeting Fannie Mae, Freddie Mac, and specific investor requirements; and, meeting quality control guidelines appropriate to a Ginnie Mae Issuer.
Furthermore, quality control servicing identifies inadequacies, errors, or abuses relating to particular persons or practices involved in the loan servicing process, which becomes an alert to initiate corrective action. And it helps to prevent fraud by evaluating, documenting, and monitoring the general quality of loans serviced, thereby expanding the scope of quality control reviews when fraudulent activity or patterns of deficiencies are identified.