Many organizations dread the quality control function. It’s is such a lengthy process that leaves employees feeling drained. So, some organizations have chosen to overlook the process completely.
But quality control procedures safeguard your operations against extending loans to unworthy applicants. Better still, it protects you from becoming the prey of sophisticated scammers.
Still, debating whether quality control is a worthy try for your business? Here are six reasons to get a post-closing control audit.
1. Ascertaining a Borrower’s Income and Employment Information
Standard procedures need borrowers to declare their employment status when borrowing. Employment or incomes status is a strong indicator of the capacity to repay the loan.
Sometimes a borrower loses this capacity to pay, right after you have checked their income information. Conducting a post-closing quality control will bring such scenarios to your attention. So, you won’t extend loans to applicants with a higher risk of default.
2. Quality Control Helps You Verify the Condition of a Collateral
Verification of a borrower’s collateral information is an integral function. QC enables you to confirm the details of the collateral. You’ll make sure the collateral doesn’t have a lien on it.
Conducting a post closing quality control saves you from protracted legal battles. The cases arise out of a dispute about the ownership of the collateral.
3. Reviewing a Borrower’s Credit History
You can miss debts attached to a borrower during the initial underwriting process. Conducting post-closing will highlight such discrepancies. Besides, QC procedures reveal extra red flags from other sources.
This will enable you to give loans for buying a house to only legit applicants with a good credit history.
4. Owner-Occupancy Verification
Post-quality control QC re-confirms the owner-occupancy relationships. For loans secured via a principal house. The process will involve reviewing the residence’s insurance policy.
Other documentation such as income tax returns will come into play too. All this is in a bid to find out that the house is that of the principal borrower.
Compliance with industry standards is the Achilles’ heel for most institutions. Yet some of the non-compliance incidences result from unintentional mistakes.
A quality control audit reviews all the operational processes. It helps you confirm that you are operating within the recommended guidelines.
6. Cost Savings
Lending to borrowers with a high risk of defaulting leads to massive losses. So is paying hefty fines because of flouting industry regulations. There’s a need to manage these expenses if you want to remain a going concern.
Quality control procedures enhance the accuracy of your operations. Avoiding mistakes results in cost savings in the long run.
Streamlines Your Operations by Implementing Quality Control Procedures
Implementing quality control procedures has a myriad of benefits. Chief among them is it helps you lend to worthy borrowers. They might help your business grow by the interest they generate.
Further, quality control procedures ensure you avoid unnecessary conflicts with the regulatory authority. Streamline your operations by integrating QC in your processes. You can outsource the service if you want to focus on your core competencies.
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