Why does your company need Quality Control/Policy and Procedures Manuals?

State Requirements for Quality Control

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1.)  To Meet the Requirements of the States when applying for/renewing a License.

States hold employers liable for the actions of employees.  Without documented policies, the Regulator cannot be sure the employer has established standards of conduct and best practices. 

2.)  To Answer Operational Concerns of a Regulator.

Often lenders do not have sufficient operational, credit policy, or process management support which can result in concerns for examiners.  Comprehensive, cohesive policies and procedures are the proper response to this concern

3.) To Meet the Requirements of FNMA (Fannie Mae), FHLMC Freddie Mac, FHA/VA, warehouse lenders and correspondent investors.

Written Policies and Procedures are a requirement of the agencies when you apply for status as a seller or servicer

4.)  To Remove Legal Liability and Support Errors and Omissions

If you do not have written policies and procedures you have no recourse against your employees in the event of any violations.  This is critical if you have to discipline an employee or defend yourself in a Legal Action

5.)  To Provide an Internal Training Program

Mundane, repetitive training is managed uniformly.  Handle simple tasks that consume an inordinate amount of management time like training

• a receptionist how to answer the phones, manage communications, or order supplies a
• new processor to submit a loan, order a credit report or appraisal, or set up a loan 
• a newly hired loan officer what the requirements for completing a registration form, lock in agreement, application, or good faith estimate


• an underwriter what the underwriting flow is, who the customers are, the difference between a wholesale submission and retail submission;
• an office manager how to go about hiring, interviewing, reviewing employees or setting up a new branch;
  
  

6.)  Avoid Misinformation

In any of these areas documenting the process is time consuming.  Worse yet, the instruction for procedures and "how to" do something as simple as determine which credit bureau or appraiser to use tends to change from person to person. This can perpetuate misinformation.  

7.)  Initial Internal Training for Employees.

Avoid repetitive process instruction and redundant errors.  Policies and procedures manuals give you the opportunity to train a position specific function.  They become the foundation for your internal new employee training program. 

Arizona - Origination Policies
California (DBO) - Quality Control Plan, AML  (BRE) Written Supervisory Plan, Identity Theft Plan (Red Flag/FACTA)
Connecticut - Supervisory Authority Principals/Managers Liable for Employees Actions
Florida - Origination Policies
Georgia - Quality Control Plan - Production Quality Control
Hawaii * - Quality Control Plan, Information Security, Anti-Money Laundering, Vendor Management
Idaho - Business Plan, Quality Control, Compliance
Illinois - Quality Control Plan
Indiana - Business Plan
Kentucky - Business Plan
Maryland - Principals/Managers Liable for Employees Actions Sub-Prime/Hybrid Loan Guidance - Origination Policies
Massachusetts * - Principals/Managers Liable for Employees Actions Sub-Prime/Hybrid Loan Guidance, Information Security
Michigan - Principals/Managers Liable for Employees Actions Sub-Prime/Hybrid Loan Guidance, Quality Control Plan, Loan Program Guidelines
Missouri - Business Plan
New Hampshire - Errors and Omissions Insurance and predatory lending policies, FACTA Red Flag, Quality Control, AML Plan
Nevada - General Business Procedures and supervision
New York * - Principals/Managers Liable for Employees Actions Quality Control Plan - Fair Lending Plan - Information Security Plan, Vendor Management, AML
Ohio - Business Plan Principals/Managers Liable for Employees Actions - Origination Policies
Oregon * - Advertising Requirements, Builder Relationships, Identity Theft, Supervisory Plan, AML Plan
Rhode Island - Business Plan - Sub-Prime/Hybrid Loan Guidance
South Dakota - Business Plan - Appraisal Policy
Texas - Written Best Practices, Quality Control, Compliance , AML
Utah - Quality Control and Principal Lending Manager Plan
Vermont - Business Plan, Anti-Predatory Lending
Virginia - Business Plan, Advertising, Anti-Predatory, Written Policies and Procedures
West Virginia - Sub-Prime/Hybrid Loan Guidance, Red Flag ID Theft
Washington * - Written Supervisory Plan, Quality Control, Red Flag

Agencies/Investors Requiring Quality Control Process

FHA
FNMA
FHLMC
RHDS
USDA
VA
FDIC
OCC
NCUA