Understanding The Process Involved In Post Closing File Reviews

Post closing file reviews are nothing but quality control tools that help to assure the quality of the loan transaction

. It is more like a rule ordered by HUD-FHA, VA, Fannie Mae, Freddie mac and many other investors on all mortgage brokers/bankers. It is basically to assure that with whom these mortgage brokers and bankers do business have quality control reviews conducted of at least 10% of their closed loan files.

Each file submitted for the review of quality control needs to go through a proper procedure. First, each mortgage loan file submitted must contain the required documentation in accurate and complete form as mentioned and set forth in the sellers guide. Each file is needed to be acco-fastened on the right side of the folder with documents properly kept in the listed manner. The file should also contain the loan number as provide by the State of New York Mortgage Agency (SONYMA).

Two, the seller is then required to receive SONYMA approval of the initial post-closing package within 35-days from the closing date. However, if the seller does not get the approval within the mentioned timeframe, then he will be assessed late delivery penalties. And, to avoid such incidents, it is recommended to submit the file not later than 3 business days prior to the 35th day from closing.

Lastly, after the review of the mortgage file, a decision will be faxed by SONYMA to the seller within 3 business days. And, if the file has been approved, then faxed notification will include the scheduled purchase date. However, files containing inadequate documentation will not be purchased and under such scenarios, the seller will be informed via telephone and fax of the corrections required.

The mortgage file containing inadequate documents will be returned at sellers expense under certain circumstances, if:

The closed loan document checklist is found missing from the file.

One or more than one required document is omitted from the file.

Any three errors like, mortgagor, title, company are found.

Any minor errors that are not corrected by Seller within 72 hours after the notification in regard to the deficiencies are informed to the seller.

In post-closing file reviews, the seller is liable to be assessed penalties if Mortgage loans close at incorrect interest rate or close after the expiry date of commitment. Under such circumstances, the authorised party, SONYMA will be requiring a letter from seller admitting acceptance of the penalty.

To get the depth information about these critical issues, it is recommended to consult mortgage advisor companies online who will also brief you about pre closing file reviews and many other quality control issues. So, make the most of it and know more about legal matters while going for a loan.

by: Sara Roberts

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