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  • Writer's pictureQC Verify

Leveraging AI as you balance compliance and quality control

In the realm of finance, particularly in the mortgage sector, compliance is non-negotiable.  The complexities of regulatory requirements demand meticulous attention to detail, often leading to significant resource allocation. However, with the advent of Artificial Intelligence (AI), the landscape of mortgage compliance is undergoing a transformative shift, offering unprecedented efficiency, accuracy, business solutions, and simplified data aggregation. As the industry begins to engage AI solutions to expand process automation, reduce workload, and improve scale, it’s important to understand when and where the advantage should be accessed, as well as the potential impact on compliance and quality control.


We’re all familiar with the complexities that compliance and regulations entail, along with underlying state and federal regulation and investor requirements, all of which continue to evolve.  The sheer volume and intricacies of guidelines present a formidable challenge for mortgage originators, necessitating rigorous scrutiny over every aspect of the mortgage process.  Enter AI as a means to expand process automation and decision-making throughout your organization, applying rules and requirements from initial point of contact through investor purchase and servicing disposition.  AI has the capacity to engage disparate systems infrastructure, adding augmented functionality and advanced logic that simplifies business processes while improving output.  This extensive impact simultaneously increases the magnitude of your auditing and quality control efforts, as AI is not fallible, the challenge resides in not becoming entirely reliant on AI processing and results.


Turning Documents into Data

BENEFIT:  One of the primary challenges in mortgage origination is the total sum of documents that necessitate review, processing and verification. AI can assist in this effort by leveraging Optical Character Recognition (OCR) and Natural Language Processing (NLP) technologies to identify information as it is received, as well as scraping relevant data from emails and document files and then using this data to complete file analysis. Traditional loan quality and file determination checkpoints can be reimagined as AI enables dynamic assessment and decisioning while data is accumulated.  

QC & AUDIT:  It’s important to ensure that extracted document text or data is accurately consumed and correctly made a part of any underwriting or closing analysis, as well as ensuring decision-making is aligned with current investor guidelines.  Exception processing becomes a key component of your QC program, whereby discrepancies and inconsistencies are appropriately flagged for higher level or human review.    


Advancing Valuation Scope

BENEFIT:  Traditional valuation methods continue to be subjective and prone to bias, as the industry rapidly moves toward automation in this area, AI adds the lift needed to analyze extensive amounts of data that reflects historical sales data. Investors have embraced utilizing AI for these purposes.  From the originator perspective, this facilitates investor and proprietary analysis that is able to consider both credit and collateral at the onset, fast tracking loan processing based on data driven results.

QC & AUDIT:  On the flip side, collateral assessment is becoming almost entirely based on data, which can improperly consider property nuances. For example, real estate data can be unavailable or grossly outdated depending upon when the last sale took place.  Property discrepancies can also be exacerbated in rural areas, as well as areas of dense population where houses on different sides of the same street can have value disparity. Establishing quality second reviews becomes critical in this environment and should incorporate audit and analysis of data exceptions and risk profiles.


Expediting Investor Purchase

BENEFIT: Operational capabilities strengthened by AI can add speed and clarity to your post-closing and pre-funding processes, identifying missing data as well as evaluating errors, misrepresentation, and fraud throughout the loan lifecycle.  As the mortgage risk landscape continues to expand and unforeseen factors emerge at random stages of the process, AI helps ensure loan files are ready for purchase and transfer within hours of closing and recording, versus days and weeks, minimizing warehouse line and delivery risk.

QC & AUDIT:  AI provides capabilities to continuously monitor and analyze loan data, adjusting risk components and determinations in real-time. While AI can automate processes and flag potential issues, the final decision-making should not exclude the importance of human expertise and oversight. Complex operational processes and nuanced scenarios remain a norm in mortgage origination and delivery.  Overlooking this importance can lead to costly corrective action and repurchase. A thorough QC and audit process can offer and evaluate both automated and manual processes, minimizing risk and saving significant costs for your organization. 


Trust but Verify

The list of areas that benefit from AI can continue at length but the message is consistent… trust but verify.  AI is adding unparalleled efficiency, accuracy, and expedience. Whether automating document analysis, assessing valuation data, or managing prepurchase risk, AI is helping reimagine the entire origination process.  It is however, essential to maintain a balance between automation and human oversight to ensure quality control diligence and data integrity.  QC Verify understands the pressure on originators to embrace AI, especially given the added capacity to scale and retract amidst current market volatility.  As a proven QC and audit innovator, we also recognize the need to verify the data, algorithms, and results of new AI technologies to ensure that output is appropriately aligned with industry regulation and requirements.


QC Verify has built its reputation on verification in a compliant, auditable, quality-controlled framework.  As early adopters of automation, we are also intelligently analytical and concise when it comes to marrying innovation with a human touch.  We approach every relationship individually to ensure the technologies you engage are providing secure accurate results and that the areas that may be lagging in terms of automation are also able to deliver consistent reliable outcomes. Offering personal, customized QC and audit planning, QC Verify helps leverage your strengths and weaknesses to deliver a meaningful QC experience from education through innovation.


Find out how you can embrace AI technologies and still proactively balance compliance and quality control with QC Verify.  Experience the difference that an innovative and experienced QC provider can make when you visit us at – sophisticated technology with a human touch.

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