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| A Snapshot for Participating Financial Institutions | Winter 2014 |
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| Keeping Up with Quality Control |
The MPF® Program values the high quality performance of the mortgages delivered by participating financial institutions (PFIs) under its various mortgage products. Since you know your customers and understand the local market conditions, the payment history of these mortgages generally outpaces those of the broader conventional conforming market.
During 2013, the MPF Program increased its efforts to ensure that the high credit quality of the loans PFIs deliver matches the production of high quality mortgage data and documentation. This reflects the current standards of the secondary mortgage market. Loan quality is not just based solely on delinquency performance; equally important is ensuring the loan was originated in compliance with regulatory requirements, has been properly documented, and is underwritten to eligibility standards. Documenting loan justification at the time of origination may take more time, but it will save time in the long run if a PFI needs to remediate issues later.
Under new requirements established by Fannie Mae that go into effect on January 1, 2014, both the MPF Program and PFIs are now charged with enhancing their quality control (QC) programs related to mortgages sold under the MPF Xtra® product. This is  the first of a series of emails that will announce some of the MPF Program’s changes as well as remind you of some of the new requirements for your own in-house quality control initiatives.
MPF Program QC Initiatives: QC Sampling for MPF Xtra Product Mortgages
Instead of sampling mortgages once a year, the MPF Program will begin sampling MPF Xtra loans for QC review closer to the mortgage purchase date. The MPF Program will sample 10% of MPF Xtra volume in the month following the sale of the loans by the PFI. As a result, some PFIs may have their sold mortgages sampled every month.
Your Federal Home Loan Bank will continue to notify you through an email when a loan or loans have been chosen for QC review. The benefit of sampling closer to loan origination is that it should be easier for PFIs to remediate individual loan defects as well as remediate loan origination defects in a timelier manner.
PFI In-House QC Program Requirements for All MPF Program Mortgages: Effective January 1, 2014
The MPF Program Origination Guide has been updated to include new pre-closing and post-closing QC requirements as well as clarify existing information. Click here to read the series of emails.
For More Information
Should you have any questions, please contact your MPF Bank Representative. | |  |
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