Investors require that their lenders re-review a portion of the loans that are originated each and every month to verify that the loans were made in accordance to their program guides and underwriting guidelines. Additionally, the party that re-reviews the loans must be independent from the Production and Secondary Marketing departments and typically reports directly to the President or CEO.

This re-review is known as Quality Control and the representative sample is a minimum of 10% of a given month's production.

Alternatively, firms may use statistical sampling as a means of selecting the representative sample, but the sample size must be statistically valid. Stewart Lender Services provides a Quality Control services that satisfies the independent requirement and the sample size/selection of loans reviewed are typically selected by the client.

Our Quality Control program focuses on the underwriting process in accordance with the requirements set forth by FNMA.

We will review each loan to ensure that loan conforms to the investor's quidelines, and the quality is acceptable to the secondary market investors, and that the loan meets specific FNMA requirements. We verify the existence and accuracy of the following documents that were used in the lenders underwriting decision:

• Legal Documents
• Credit Documentation
• Property Appraisals

Additionally we will verify that select documents are dated correctly including the right of rescission, the loan application, the HUD-1 and the disclosure documents.

As required of any certified quality control program, SMI will order Residential Mortgage Credit Reports and Field Review Appraisals on 10% of the sample selected. Lastly, SMI will perform both asset and income verifications.