MetaSource’s annual analysis of third-party QA reviews uncovers the impact high volumes, staffing challenges & technology had on MERS Members
MetaSource, a trusted MERS QA and compliance partner, released its 2021 MERS QA Findings Report, which is based on an annual analysis of third-party QA reviews.
The reviews are required for MERS Members with more than 1,000 active mortgage identification numbers (MINs) in their servicing portfolios as of March 31 – a number that grew in 2021 as the result of record mortgage volumes.
These record-breaking volumes, staff shortages, and office closings were all sources of ongoing disruption in the mortgage industry last year. This fact was reflected in MetaSource’s MERS QA findings.
Policies & Procedures: A Perennial Struggle
Maintaining detailed, up-to-date internal policies and procedures is a longstanding challenge for MERS Members. However, it was heightened in 2021. In fact, Rachel Pylant, MetaSource Director of MERS Services, said, “About 90% of the Members reviewed last year did not have detailed procedures.”
According to MetaSource’s analysis, this elevation was due to both staffing issues and increased volumes. Several servicers were challenged with meeting policy and procedure requirements because they were left without enough employees and adequate MERS support. Others were required to obtain a third-party review for the first time after hitting the 1,000-MIN mark. They, too, were left without the support they needed.
Data Reconciliation: An Area of Improvement
Despite a notable increase in policy and procedure challenges, there were some signs of improvement, especially among Members making use of MERS reconciliation software. The Members who used advanced reconciliation software, like MetaSource’s mintrak2®, effectively met requirements. Those who did not use advanced compliance software were not so lucky, which is why data reconciliation remained a main source of difficulty in 2021.
MetaSource Top MERS QA Audit Findings for 2021
Here are the top findings identified by MetaSource’s annual analysis of third-party MERS QA reviews:
- Written internal policies and procedures were missing or did not contain enough detail to ensure compliance with the most recent MERS requirements
- Failure to conduct monthly data or quarterly data reconciliation based on requirements and volume
- Failure to properly manage/monitor internal audits, subservicer, or third-party vendor through reporting of QC reviews to confirm MERS standards are met
Visit the MetaSource Mortgage Blog for the full 2021 MERS QA Findings Report, which includes more details around last year’s top challenges as well as best practices for avoiding findings in 2022.
About MetaSource, LLC
MetaSource is a Digital Transformation Solutions provider, focused on Business Process Outsourcing (BPO) / Business Process Management (BPM) services integrated with Enterprise Content Management (ECM), workflow solutions, compliance services and customer experience processes. MetaSource helps its clients manage risk, improve quality, increase efficiency and realize their most important goals – with special expertise serving the mortgage industry. MetaSource’s mortgage services include quality control (QC) audits (pre-fund, post-close, servicing, MERS), lien release, whole loan purchase reviews, and cutting-edge technology. MetaSource’s solutions enable its clients to focus on their core business while MetaSource does the rest. For more information, visit: https://mortgage.metasource.com
