ACES Q3 2024 Mortgage QC Trends Report shows ‘sharp rise in insurance defects’ for second time this year

February 13, 2025 at 07:00 AM EST

News Source: ACES Quality Management

Fluctuations in key underwriting categories reinforce the need for quality control

DENVER, Colo., Feb. 13, 2025 (SEND2PRESS NEWSWIRE) — ACES Quality Management® (ACES), the leading provider of enterprise quality management and control software for the financial services industry, announced the release of its quarterly ACES Mortgage QC Industry Trends Report covering the third quarter (Q3) of 2024. The latest report analyzes post-closing quality control data derived from ACES Quality Management & Control® software.

Image caption: ACES Quality Management.

NOTABLE FINDINGS FROM THE Q3 2024 REPORT INCLUDE THE FOLLOWING:

The overall critical defect rate declined from Q2 to Q3 by nearly 17%, ending the quarter at 1.51%.
Income/Employment was again the leading category of defects at 25%, followed by Assets at 16.67%. Credit and Loan Documentation tied for the third most defects at 12.12% each.
Insurance defects increased more than four-fold from a nominal .65% in Q2 to 3.03% in Q3, demonstrating a volatile pattern since Q1 when the share stood at 8%.
Mirroring the origination environment in Q3, lenders increased their reviews of refinances while defect share declined.
Purchase defect share increased despite a decrease in purchase reviews.
Conventional review share increased slightly in Q3, while FHA, USA and VA loan reviews decreased.
Defects declined significantly for conventional and USDA loans this quarter, while FHA defect share increased by 25%.
VA defect share increased significantly in Q3, though primarily driven by a temporary phenomenon.

“The drop in the overall critical defect rate this quarter is a welcome shift, but the underlying trends tell a more complex story. The sharp rise in insurance defects, combined with fluctuations in key underwriting categories, reinforces the need for lenders to stay agile in their quality control efforts,” said Nick Volpe, executive vice president of ACES Quality Management. “As market conditions evolve, leveraging technology and data-driven insights will be critical to maintaining loan integrity and mitigating future risk.”

Findings for the Q3 ACES Mortgage QC Industry Trends Report are based on post-closing quality control data derived from the ACES Quality Management and Control® benchmarking system and incorporate data from prior quarters and/or calendar years, where applicable. All reviews and defect data evaluated for the report were based on loan audits selected by lenders for full file reviews.

The Mortgage QC Industry Trends Reports are available for download, free of charge, at https://www.acesquality.com/resources/reports.

About ACES Quality Management:

ACES Quality Management is the leading provider of enterprise quality management and control software for the financial services industry. The nation’s most prominent lenders, servicers and financial institutions rely on ACES Quality Management & Control® Software to improve audit throughput and quality while controlling costs, including:

Over 70% of the top 20 independent mortgage lenders;
7 of the top 10 loan servicers;
11 of the top 30 banks; and
3 of the top 5 credit unions in the United States.

Unlike other quality control platforms, only ACES delivers Flexible Audit Technology®, which gives independent mortgage lenders and financial institutions the ability to easily manage and customize ACES to meet their business needs without having to rely on IT or other outside resources. Using a customer-centric approach, ACES clients get responsive support and access to our experts to maximize their investment. For more information, visit www.acesquality.com or call 1-800-858-1598.

This press release was issued on behalf of the news source (ACES Quality Management), who is solely responsible for its accuracy, by Send2Press Newswire.

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ACES Q3 2024 Mortgage QC Trends Report shows ‘sharp rise in insurance defects’ for second time this year

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