ClickCease FAQ about Mortgage Compliance - Regulatory Solutions

Mortgage regulatory solutions that lend you confidence.

The Regulatory Solutions FAQ section provides you with answers to your questions about our company, our services and the processes we follow. Please contact us if there are any additional questions not answered below.

Who is Regulatory Solutions?

Regulatory Solutions is an independent third party company that works with lenders, banks, and mortgage companies to perform quality control loan reviews of loans originated by the lender to ensure compliance with regulations and guidelines as required by Fannie Mae, Freddie Mac, VA, FHA, USDA and private investors. The agencies and private investors that purchase or guarantee mortgage loans require lenders to perform independent reviews of a sampling of closed loan files.

We also own Culp QC based in Owensboro, Kentucky, a leading provider of quality control services to the mortgage lending industry since 1995.

Why are you pulling my credit report?

As part of the quality control review process, we are required to re-verify certain information from the mortgage loan file. Re-verifications are performed of employment, income, deposits, assets, tax returns, and other file documents in accordance with agency or government guidelines, as applicable. We will also re-verify gift funds. Regulatory Solutions pulls and evaluates Tri-merge credit reports in accordance with agency requirements. This will not affect your credit score, it just allows us to verify that the information used in the underwriting process was accurate and correct. Please note page 4 of your application, which authorizes us to verify or re-verify the information for any legitimate business purpose.

What loans are required to be reviewed?

FHA, Fannie Mae, and Freddie Mac quality control guidelines require a statistical sampling or 10% of all closed loan files be reviewed; 100% of Early Payment Default loan files (FHA, Freddie Mac); and a random sample of all denied or rejected loans. Discretionary samples are required by Fannie Mae and considered a best practice by FreddieMac in order to focus on higher risk loans.

How often are you required to perform quality control reviews?

Loan files are reviewed on a regular and timely basis in accordance with applicable investor, agency, and Federal Home Loan Bank guidelines. Regulatory Solutions utilizes the most conservative timing requirements with the review and any rebuttal of findings must be performed within 90 days of loan closing, or 60 days of selection in accordance with agency requirements in order to ensure any previously undetected problems are identified as soon as possible. Reports are provided to management in time to allow for review and to be reported to senior management within agency timing requirements.

How are loans selected for review?

Loans are selected on a monthly basis from closed loan reports provided within 30 days from the end of the month the loan closes utilizing the systematic random sample process. Discretionary selections are used to supplement the random sample selection to ensure a sampling of loans with characteristics related to errors or defects identified in prior pre-funding and review results; and focuses on loans with higher risks, potential for fraud and for potential errors are reviewed.

How are loan files submitted for reviews each month?

Once loans are selected, either upload the entire imaged file through Regulatory Solutions’ SFTP site or to BlitzDocs. Regulatory Solutions is a Certified Due Diligence and QC Provider with Xerox Mortgage Services BlitzDocs imaging system. Loan files can be uploaded directly into the BlitzDocs’s imaging system which sorts the loan files into Regulatory Solutions’ stacking order for review.

How does the quality control process work?

Our quality control analysts review the loans files utilizing checklists designed to comply with Fannie Mae, Freddie Mac, VA and USDA/Rural Housing guidelines. Regulatory Solutions’ quality control review process provides a Web portal for clients to interact and communicate with Regulatory Solutions electronically once each individual loan review is complete. Regulatory Solutions can send exceptions directly to designated areas of responsibility or to a central representative for review that you select to respond to loan review exceptions 24/7/365. Clients provide responses to loan exceptions electronically via a web based communication portal account. The system can be accessed from any web browser. Users can also use the communication portal account to attach supporting documentation. Once responses are received, Regulatory Solutions will clear any item based upon the responses and issue a final report for review. We are available to respond to questions regarding the reviews, reports issued and exceptions cleared as well as analyzing the trends.

When are final reports issued?

The entire quality control process, which includes selection, review, and rebuttals of any findings and issuance of reports, is completed within 90 days from the month of the loan closing. A Gross and Net Defect Rate is given for both compliance and credit (which includes collateral and closing) for the two most severe categories rated which are reported on a monthly basis for all types of reviews performed (random, discretionary and targeted). The final report also describes the selections, the process used in the review, a summary of the exceptions by category, and the re-verification history.

What are the turnaround times for pre-funding reviews?

Regulatory Solutions produces a report on each individual loan file reviewed which indicates whether the file is either “clear to fund” or “not clear to fund”. A list of deficiencies, which needs to be corrected on each loan file prior to funding, is provided in the individual loan file report. Loans are typically reviewed within 24-48 hours from receipt (exclusively of weekends and holidays).

How are servicing quality control reviews performed?

Servicing reviews are based on servicing functions such as: New Loan Set-up, Default Administration Monitoring, Loss Mitigation, Hazard Insurance, Flood Insurance, Payoffs/Satisfactions/Release/Modifications, Customer Service Complaints, Loan Assumptions, Foreclosure, MIP/PMI Billing, Claims Submissions, Escrow Administration, Payment Processing, Servicing Transfers, and ARM Adjustments.

What are the costs of the reviews?

The fees charged vary based on the type of review performed. We charge a per file review fee. Third party costs for: 1) field reviews of appraisals; 2) mailing and third party costs for re-verifications are invoiced for reimbursement at actual cost.

Do you carry liability insurance?

Regulatory Solutions maintains appropriate levels of insurance coverage.

What industry orgnizations are you a member of?

We are a member of the Mortgage Bankers Association, the Mortgage Bankers Association of Alabama and the Mortgage Bankers Association of Kentucky. We are also a certified Women’s Business Enterprise (WBENC).

Should I be concerned about security?

Due to the confidentiality of the information utilized in performing services Regulatory Solutions places great importance on maintaining internal controls and complying with applicable federal and state laws, rules and regulations. A third party security vendor monitors our office 24 hours a day, 7 days a week. Regulatory Solutions performs third party criminal background checks on all employees through a third party service.

How do I subscribe to the RegAlert Blog?

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Regulatory Solutions LLC P.O. Box 131478 Birmingham, AL 35213 Call 855-734-7655

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  • Regulatory Solutions - Mortgage Auditing Provider
  • Regulatory Solutions - Mortgage Auditing Provider