Table of Contents

Table of Contents	i

This is a Section Heading	ii

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Section 1 – Investor/Agency Quality Control Program	3

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Scope	3

Audit Coverage	3

Using Bitmaps and Image Files Instead of Text	5

Itemization of Amount Financed	7

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This is Normal Text. It is a justified paragraph which ends with a wrap at the end of a line.

To that end, following is our quality control plan, which we have adopted to insure the quality of the loans we deliver to our investors so that we may continue to enjoy a mutually profitable relationship. In addition, our goal is to achieve 100% compliance with Federal, State and Local regulatory requirements.

This is a Second Level Heading

We use a second level heading to make major points throughout a section. Second level headings would highlight major areas within a section. There are conflicting interests when dealing with mortgage quality control plans, the quality control process of a wholesale lender and the quality control process of the mortgage broker. Obviously, mortgage brokers do not make loan underwriting decisions, or funding decisions, but must still participate in the post closing review of loans. The determination of deficiencies, fraud, or other errors discovered in a post closing review must be addressed by BOTH the mortgage broker and the mortgage lender.

Heading Three Shows Specific Topics

They show up in the Table of Contents and are used to easily guide the reader to the page containing the information shown. As a result, they should read like headings, not sentences.

Section 1 – Investor/Agency Quality Control Program

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The overall objective of any spot check system is to accurately measure the basic quality of a product against predetermined standards. The specific objectives of the spot check system are to test the authenticity of various documents that are used in the credit evaluation process. Logically, a prudent credit decision cannot be made if the information used in the decision process is inaccurate.

The second objective of the spot check system is to test for the compliance with industry standards used to process the loan transaction. It is not the intent of the system to completely reprocess and/or re-verify all of the information contained on every credit document. The intent of the system is to select the most important documents and to ask specific questions aimed at uncovering unacceptable practices, procedures or inaccurate documentation.

Scope

Ten percent (10%) per month of each branch's closed files (funded, declined or withdrawn). This includes a minimum of one conventional, one conventional insured, one FHA and one VA (if applicable) and one denied or withdrawn loan.

Audit Coverage

Each of the following areas will be addressed in the quality control review:

This is a Bulleted list style This is used instead of outline numbering unless absolutely necessary because of the tendency of outline numbering to truncate and continue outlines out of context due to Microsoft wizards

Bullet lists are great for step by step

They condense paragraphs into easy to read points when an explanation isn’t necessary for each item.

Using Bitmaps and Image Files Instead of Text

Avoid putting other documents into your template. When you enclose a sample form in text format, the template will apply the document’s formatting to the template causing corruption. Follow the instructions for inserting screen shots and use screen shots of the document, print and grab from a *.pdf, or convert to a .jpg or *.gif format. Then it can be inserted without corrupting the template.

Tables And Table Headers

Tables are a great way of organizing a lot of repetitive data. Rather than writing pages of descriptive text, create columns that describe the information. The column header is a table header. Format your table so that the header row appears at the top of each row. Also make sure that the rows don’t break across pages, as this can be confusing to a reader.

This is Table Header	Retention Period (Years)
This is arial table – which is left justified on purpose.	Permanent
Bank debt deduction	7
Bank deposit slips	4
Bank reconciliations	4
Bank statements	4
Bills of lading	4
Budgets	2
Cancelled checks	4
Cash disbursements journal	Permanent
Cash receipts journal	Permanent
Contracts - purchase and sales	4**
Credit memos	4
Depreciation records	4**
Employee expense reports	4
Employee payroll records, (W-2, W-4, annual earnings records, etc.)	6**
Financial statements -- annual	Permanent
Financial statements -- interim	4
Freight bills	4
General journal	Permanent
General ledger	Permanent
Internal work orders	4
Inventory lists	4
Invoices -- sales and cash register receipts	4
Invoices -- purchases (merchandise)	4
Invoices -- purchases (permanent assets)	4**
Payroll journal	4
Petty cash vouchers	4
Production and sales reports	4
Purchase journal	Permanent
Subsidiary ledgers (accounts receivable, accounts payable, etc.)	6
Time cards and daily time reports	4
Worthless securities deduction	7
*Unless otherwise noted, all retention periods begin with the date the return was filed. If the statute of limitations concerning a tax year is extended, retention should be extended accordingly. There is no limit for returns that substantially underreport income or that are filed fraudulently.
** Retention periods begin after termination, expiration, disposal, etc.

Itemization of Amount Financed

Services that Are Permissible – Lender to Broker
Taking Application

Analyzing Income/Debt Qualification

Educating Homebuyer on Process

Collecting Financial Information

Verifying Financial, Property or Transaction Information

Providing Federal Disclosures

Assisting Borrowers with Contingencies and Advising of Loan Status

Ordering Legal Documentation

Participating in Loan Closing

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Company Name

This is header Text

Quality Control Module

Introduction

Page ii

Page i

Section – This is footer text

Page 6

Section 2 – Guidelines for Compliance with State and Local Laws

Page 7

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Indicate the exact expiration date of the lock-in

The loan amount, less prepaid finance charges, is the amount financed.

The Prepaid Finance Charges are itemized. In this case, the attorney was required by the lender, so the charge is considered a prepaid finance charge.

Quality Control

Thomas Morgan

2007-10-26

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