Fannie Mae Selling Guide D1-3-01 — Lender Post-Closing Quality Control Review Process

Fannie Mae Selling Guide D1-3-01 — Lender Post-Closing Quality Control Review Process

Effective 2026-04-01 · publisher's stamp for this provision

D1-3-01, Lender Post-Closing Quality Control Review Process (04/01/2026) Introduction This topic contains information on the lender’s post-closing QC review process and selecting loans for the post-closing QC reviews, including: Timing of QC Review Process Loan Selection Process Random Selections Discretionary Selections Timing of QC Review Process Loans must be selected for post-closing QC reviews on at least a monthly basis. The entire QC cycle (selection, review, rebuttal, and reporting) must be completed within 90 days from the month of the disbursement date (loans they originate) or acquisition date (loans they acquire). Note: If the lender's QC cycle is in arrears more than one 30-day cycle, the lender must provide written notice to its Fannie Mae customer account team or QC Specialist. Loan Selection Process The lender must establish and document a process for identifying a representative sample of loans for QC file reviews. The post-closing QC process must include both random and discretionary file selections. Random Selections The random sample is a critical measure of loan quality. It provides representative insights into the overall quality of originations during a specific period and serves as the basis for calculating the lender's defect rate. The lender has the option to implement one of two methods of random sampling: a 10% sample of all monthly loan production, or a statistically valid sample of all monthly loan production. Both sampling methods require the lender to randomly select loans. The lender must decide which sampling method is best for its organization to best allocate its QC resources. With both options, the post-closing random sample must be completed using full-file reviews. Lenders must conduct separate reviews for their retail originations (loans they originate) and their third-party originations (loans they acquire). Specifically, the lender must select a stratified sample for both channels using either methodology described below. Random Sample Types Random - 10% Sample The lender must select for its post-closing QC review, a minimum of 10% of the loans that it originates or acquires using a random selection methodology. If 10% is less than one loan, then at least one loan must be selected. The loans selected must be representative of the lender’s overall book of business, including: • all of the different types of loans the lender offers, • loans originated by each branch office, • manually underwritten loans, and • loans that were processed through automated underwriting system(s) utilized by the lender. Random - Statistical Sample If the lender uses statistical sampling for its selection process, at a minimum, the statistical sampling model (variables) must be calculated using a 95% confidence level with a 2% precision rate and a statistical statement of six months. Discretionary Selections Discretionary sample selections supplement, but do not replace a lender's random sample. The purpose of a discretionary sample is to look for or highlight areas that may pose unique or elevated levels of risk for the lender or to confirm that a particular control or process is working as intended. To be effective, the sampling methodology for discretionary review types must be flexible enough to target loans with higher potential for risk and adjust as these risks change over time. The lender must establish a process for selecting loans for its discretionary post-closing QC. While the lender may include randomly targeted reviews, the process must target areas the lender identifies as having a higher potential for errors and loans that may have a high risk of misrepresentation or fraud, including early payment defaults, as described in A3-4-03, Preventing, Detecting, and Reporting Mortgage Fraud. The process should take into account the lender’s assessment of the risks inherent in its origination processes, business sources, production channels, volume, product mix, and loan performance. The lender should regularly review its risk assessment to ensure the sample selected, including sample size, is appropriate.

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