D1-3-02, Lender Post-Closing Quality Control Review of Approval Conditions, Underwriting Decisions, Data, and Documentation (06/04/2025)

The lender must verify the accuracy and integrity of the information used to support the underwriting decision for any loans selected for a QC review. 

The lender must confirm the loan was underwritten in accordance with Fannie Mae’s requirements and that adequate support for the underwriting decision is contained in the loan file.

The post-closing file review process must include a review of the loan to assess the accuracy and integrity of the information used to support the underwriting decision, and an assessment as to whether or not the loan complies with the Selling Guide and the Lender Contract and is in all respects eligible for delivery to Fannie Mae.

At a minimum, the review must include an evaluation of the:

• accuracy and completeness of the loan application;
• existence and accuracy of the underwriting documents used to support credit, income, assets, including reverifications of underwriting documents, and a data integrity review;
• underwriting decision to confirm it is supported;
• output from any third-party data analysis tools;
• data entered into DU, if applicable;
• appraisal or other eligible collateral data or documentation, if applicable;
• property eligibility;
• project eligiblity, if applicable;
• property insurance and flood insurance, if applicable;
• compliance with the mortgage insurer's guidelines, and adequate mortgage insurance coverage;
• existence and accuracy of legal, transaction documentation(for example, sales contract), and closing documentation; and
• compliance with applicable laws, as provided in A3-2-01, Compliance With LawsA3-2-01, Compliance With Laws.

The lender must confirm that all loan approval conditions required by the underwriter were satisfied and that the information on the closing documents, including the final settlement statement, is consistent with the underwriting decision and final terms of the loan.

For loans underwritten through DU, the lender must confirm that all DU Verification Messages/Approval Conditions that appear in the DU Underwriting Findings report were satisfactorily resolved and adequately supported by appropriate documentation. If DU returned an Ineligible recommendation, the reviewer must confirm that the loan was eligible for delivery to Fannie Mae.

For additional information on circumstances under which an Ineligible recommendation may be acceptable, see Chapter B3-2, Desktop Underwriter (DU) B3-2, Desktop Underwriter (DU).

The lender must review the final terms of the loan to ensure they align with the data used to support the underwriting decisions. When a lender's review identifies discrepancies between the data used in underwriting and the data verified through the QC process, the lender must reassess the underwriting decision based on the newly verified information to determine whether the loan remains eligible as delivered to Fannie Mae.

For loan casefiles created in DU, the lender must ensure all data submitted to DU is true, correct, and complete. The loan file must contain documentation supporting all data submitted to DU necessary to process the loan.

When there are inconsistencies between the data and/or information submitted to DU (or used for manual underwriting) and the source documents, the lender must complete the steps in the following table.

The lender’s file review process must include a review of any “potential red flag” messages appearing in the DU Underwriting Findings report or alerts created by sources other than DU, such as those associated with credit reports or Social Security verification systems. The lender must ensure all messages have been addressed and documented, and that the loan remains eligible as delivered to Fannie Mae.

As part of the lender's review process, it must ensure the Social Security number for all borrowers are consistent in all file documentation and that any requirements for validation of Social Security numbers were satisfied prior to closing. For additional information, see B2-2-01, General Borrower Eligibility RequirementsB2-2-01, General Borrower Eligibility Requirements.

The lender must review each transaction and each closing document for completeness, accuracy, and compliance with all underwriting and eligibility requirements, and to ensure adherence to the loan transaction. The following list reflects the most common documents that must be included in the post-closing document review. This list is not intended to be all-inclusive, and the lender must exercise judgment when determining other documents to include in the review process.

• Uniform Residential Loan Application (Form 1003)
• Signed sales contract and any applicable addenda
• Recorded security instrument and any applicable riders or addenda
• Note
• Assignment of the loan
• Mortgage insurance certificate or policy
• Any applicable government loan insurance or loan guarantee certificates (i.e., FHA, USDA, VA)
• Title evidence
• Plat or survey, as applicable
• Final Truth in Lending disclosure, as applicable
• Final settlement statement
• Other closing documents, as applicable

Note: If recorded documents are not available when the post-closing QC review is performed due to timing requirements for the review and the length of time the jurisdictions need for recording, the lender must review a copy of the document sent for recordation. The lender must also have a process to review the recorded documents when received to ensure accuracy and remediate any errors.

If errors are discovered in the post-closing review process, lenders must

• determine the significance of the errors;
• promptly correct data or documents or obtain corrected documents from the vendor or service provider (i.e., mortgage insurer, property insurer, title insurer, or escrow/closing company); and
• provide corrected documents to the document custodian, if applicable.