Correspondent New Client Quality Orientation. Updated March 2015

Transcription

1 Correspondent New Client Quality Orientation Updated March 2015

2 Table of Contents Citibank Quality Management Overview Page 3 Tier 1, 2 and 3 Defect Overview Page 4 Top Pre-Purchase and Post-Purchase Tier 1 Defects Page 5 Post-Purchase Defect Response Process Page 6-7 Ongoing Correspondent Support Page 8 Correspondent Resources Pages 9-10 Questions Page /12/2015

3 Citibank Quality Management Overview The Correspondent Performance & Execution Team (CPE) manages Correspondent Lender (Correspondent) performance accountability, delivers proactive feedback and champions our collective goal of minimizing pre purchase suspense and reducing post purchase quality defects and repurchase risk exposure for Correspondents and investors. Assess Impact Remediate / Action Goal Setting Quality Orientation Manufacturing Tolerance Levels (> 5% Post Purchase Tier 1 Defect Rate) Change Mgmt. Evaluation/Follow Up Call Address New Trends Progress Report Quality Performance Training Quality Tool Kit Best Practices Credit/Fraud/Compliance Delivery Quality Flashes Quality Calls External Performance Review Quality Assessment Tier 1 Response Trend Analysis Monthly focus on Pre Purchase Suspense and Risk QC Results Monthly Post Purchase QA Results 3 3/12/2015 Root Cause Isolation to Mitigate Repurchase and Reputational Risk

4 Tier 1, 2 and 3 Defect Overview The Citibank Risk QC (pre-purchase) and Quality Assurance (QA post-purchase) Departments review a sampling of loans throughout the month. Citibank categorizes material defects in the following manner: Tier 1 Defect: A Tier 1 defect has a high probability of investor repurchase and is either difficult to correct or is consistent with Fannie Mae/Freddie Mac Not Investment Quality (NIQ) and Not Acceptable Quality (NAQ) classifications. A Tier 1 defect could affect the borrowers ability to repay and potentially increase the risk of default. A Tier 1 defect cited on a government loan could result in indemnification, loss of ability to obtain insurance/guaranty, or result in exposing Citibank or the Correspondent to administrative actions by Fannie Mae/Freddie Mac, Ginnie Mae, or HUD/VA. Tier 2 Defect: A Tier 2 defect could result in an investor repurchase request, however, there is a probability the defect can be corrected. The Tier 2 defect poses a moderate risk around the borrowers ability to repay. Tier 3 Defect: A Tier 3 defect is not likely to result in an investor repurchase request and can typically be corrected. Tier 3 defects represent minimal impact for risk exposure or the borrowers ability to repay for a particular loan scenario. However, a Tier 3 defect is generally an example of an unacceptable loan manufacturing practice and could have adverse implications if not corrected. 4 3/12/2015

5 Top Pre-Purchase and Post-Purchase Tier 1 Defects Below are Citibank Correspondents top manufacturing defects channel-wide as reported through our prepurchase suspense, Risk QC and post-purchase audit process. Assets, Liabilities, Income and Loan Delivery are particular areas of underwriting to focus preventative and detective quality manufacturing controls. Underwriting Assets 1) AUS-required asset statements are missing or incomplete 2) Large deposits insufficiently documented 3) Gift funds insufficiently documented Underwriting Liabilities 1) Debt calculations: Proof of closure on paid off liabilities; Debts excluded (full PITI, HOA dues, etc.) 2) Non-subject property PITIA, HOA or other tax documents missing or incomplete 3) Verification of Mortgage: Pay history on off-credit report mortgages not provided; PITI documentation not provided Underwriting Income 1) Income calculations: Calculation errors, methodology differences and incorrect documentation 2) Missing or incomplete VVOE. 3) Missing or incomplete W-2 or paystub Loan Delivery 1) Version control for Credit documents 2) Data integrity and consistency between documentation and AUS Findings. 3) Documents not obtained, documents lost in process, document not delivered to the investor 5 3/12/2015

6 Post-Purchase Defect Response Process In addition to monthly performance feedback around pre-purchase quality, Citibank has developed a standardized post-purchase audit response process aimed at reducing future loan manufacturing defects and minimizing repurchase risk exposure: Throughout the month Correspondents will receive an after Citi s internal Quality Analysis review process has been fully completed on a sampled loan if a Tier 1 defect citing has been issued. The will include detail around the Tier 1 defect citing and a postpurchase response worksheet attached. Citibank requests that Correspondents respond to any Tier 1 defect citing within 10 business days whether the response is to agree and cure the citing or to disagree and rebut the finding (Please see Page 7 for additional cure/rebut guidance). A post-purchase summary is posted to the CorrWeb on the 4 th Monday of each month. The post-purchase summary will outline all of the Tier 1, Tier 2 and Tier 3 defects from the prior month as well as a six month and three month snapshot of defect percentages. ***Only Tier 1 defects require a lender response. 6 3/12/2015

7 Post-Purchase Defect Response Process (Continued) Addressing a Defect: Correspondents have the option of agreeing with the citing and providing the documentation to address the defect. In addition, we ask that Correspondents provide the point of fail in the process that resulted in the defect as well as process controls that will be added to prevent future occurrences of that issue. Rebutting a Defect: Correspondents also have the option of disagreeing with the defect citing and providing documentation to support the rebuttal. Citibank will then review the documentation and provide a response back to our clients. Due to Fannie Mae s accelerated self reporting timeframes you may receive an OTC (Opportunity to Cure) letter from Citi s repurchase department in addition to an notice. The notification and response process is an attempt to resolve the material variance prior to the loan being referred to repurchase; in some instances the loan may be referred to repurchase at the same time and cause a duplicate notice. It is important to make every effort to respond to either notice within the timeframes provided to avoid the loan from being self reported and possibly repurchased. Please send the post-purchase response worksheet to corr.qc.responses@citi.com - any supporting documents should be uploaded through the Correspondent Website using the normal suspense document upload process. 7 3/12/2015

8 Ongoing Correspondent Support Citibank meets with Correspondents on a monthly basis to maintain alignment and calibrate from a loan manufacturing perspective. We strive to ensure that lines of communication are open and any questions, concerns or issues are addressed formally in a monthly meeting. The monthly Business Review Calls will be scheduled by your Client Services Consultant and will consist of the following reports and discussion: 1) Suspense Trends Reporting: Pre-purchase suspense trend reporting. 2) Targeted Reviews: Targeted reviews will take place for the first 10 loans that are delivered the first business review call will cover the results of the loans delivered prior to the meeting. 3) Pre-Purchase Risk QC Reporting: Loans on this report were flagged during an internal audit of Citibank pre-purchase reviewers. The suspense items on these loans are identified as issues that could be potential Tier 1 defects if they had not resulted in suspense in the pre-purchase review. 4) Post-Purchase QA Report: Post-Purchase defects as reported by the Citibank QA Department. 5) New Bulletins and Quality Flashes 6) Open Discussion The Citibank AE, Client Services Consultant, CPE and Client Excellence team members will be in attendance to address any questions that arise. 8 3/12/2015

9 Correspondent Resources In addition to monthly meetings, Citibank regularly s bulletins and Quality Flashes to Correspondents. The Quality Flashes and bulletins are all part of Citibank s goal of keeping Correspondents informed and working with them to achieve high quality within the loan manufacturing process. Bulletins Bulletins are ed to Correspondents and posted to the Correspondent Website to provide updates on a variety of policy changes or updates. Quality Flashes Quality Flashes are ed to Correspondents when a specific quality trend is identified. The Quality Flash will provide you with common channel-wide issues around the trend as well as best practices and helpful tips that will help you to prevent those errors within your own loan manufacturing process. All Quality Flashes are also posted to Agentsite.com and are available for review at your convenience. Correspondent Website The Correspondent Website is a useful tool for obtaining pipeline reports, uploading suspense and post-purchase response documentation, viewing the monthly post-purchase report and identifying loans in suspense. Your Client Services Consultant will assist you with assigning a username and password for the Correspondent Website. 9 3/12/2015

10 Correspondent Resources (Continued) Agentsite.com Agentsite.com is a valuable resource for Correspondents that is available 24 hours a day. Your ISN, or client number, is all you need to sign into Agentsite.com to view a variety of quality focused documents. As mentioned, all Quality Flashes are housed on Agentsite.com Correspondents are able to review the Quality Flashes even if they missed the Quality Flash . Best Practice Documents Best Practice information is posted to Agentsite.com. Best Practice documents cover all aspects of the loan manufacturing process and provide insight for Correspondents on opportunities to strengthen preventative and detectives controls within their loan origination processes. Training Citibank offers Correspondents training throughout the year. These classes are typically held on Thursday or Friday toward the beginning of the month. Training sessions cover various underwriting topics and are delivered via Live Meeting. Our Citibank trainers deliver a live training session and are available to answer questions throughout the session. Correspondents may register for training through the Training Calendar available on Agentsite.com or Correspondents may contact their CPE, CSC or AE to sign up for a class. A list of classes and descriptions is posted on Agentsite.com please contact your CPE, CSC or AE if you do not see a class time that fits your schedule or you would like to attend a class that is not currently offered in the Training Calendar. 10 3/12/2015

11 Questions Thank you for attending today s New Client Quality Orientation! Questions? 2015 Citibank, N.A., equal housing lender, member FDIC. Citibank, Citi, Arc Design with Citi and Arc Design are registered service marks of Citigroup Inc. 11 3/12/2015