A mortgage technology service provider has launched a service that it claims reduces repurchase demands.
The service provider is ISGN.
The Bensalem, Pa.-based company announced Tuesday the launch of its loan quality audit and monitoring service. Among the features of the service are desk and field reviews, third-party re-verifications and credit report reviews. Compliance reviews and quality assurance plan review and creation are also included.
ISGN, which boasts more than 1,100 customers, said it uses statistical, discretionary and targeted sampling to determine which loans are reviewed.
According to ISGN, the new offering helps prevent the exact type of errors that lead to buy-backs and other problems. Those errors might be the result of misrepresentation of borrower income and employment, overstatement of appraisals, or errors and omissions.
The company cited data from Freddie Mac indicating that repurchases at the secondary lender have jumped by half over the last year and amounted to $2.7 billion during the first six months of 2010.
“Loan buybacks can significantly impact a mortgage lender’s bottom line,” ISGN President Niraj Patel said in the statement. “Therefore it is crucial for lenders to frequently audit the quality of their loans, and reps and warranties so they don’t suffer any unanticipated financial hit.”
