Critical Defect Rate Rises to 1.58%, Per ACES Mortgage QC Industry Trends Report

This modest defect rate increase ends a five-quarter downward trend

Published September 18, 2024

DENVER, Colo., Sept. 19, 2024—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 first quarter (Q1) of 2024. The latest report analyzes post-closing quality control data derived from ACES Quality Management & Control® software.

Notable findings from the Q1 2024 report include the following:

“Given origination levels in the first quarter of this year, the findings in this report showed greater changes than expected,” said ACES Executive Vice President Nick Volpe. “Historically, defect rates decrease when there is a decline in origination levels; however, that was not the case for Q1. Mortgage lenders are no strangers to market adversity. While the market is shifting, we hope this report will serve as a reminder to reinforce quality control across the board.”

Findings for the Q1 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 current mortgage market presents distinct challenges that lenders must navigate with precision. Although the critical defect rate remains low by historical standards, the increase in a quarter with record-low origination volumes is concerning. Notable rises across underwriting categories and unexpected insurance defects need closer scrutiny from lenders,” said Trevor Gauthier, CEO of ACES Quality Management. “Overall, the data clearly shows that lenders are under increasing pressure to maintain quality amid changing market dynamics. A proactive approach to quality control is crucial for mitigating risk and ensuring long-term stability.”

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:

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.

Media Contact

Lindsey Neal

Depth for ACES Quality Management

(404) 549-9282

lindsey@depthpr.com

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