Internal audit built around agency requirements, with recommendations that improve the business.

What the program covers

• A comprehensive initial review of financial, operational, compliance, interest rate risk, systems, and servicing practices, conducted on site
• An internal audit charter, risk assessment, audit plan, and audit schedule
• Ongoing targeted audits, typically two or three a year, of the areas your plan calls for
• Quality control: an audit of your pre-closing and post-closing QC program, QC plan, and oversight of any outside QC firm
• Secondary marketing, compliance, servicing, subservicer oversight, and branch audit programs
• Consumer compliance testing, including TRID, HMDA, and fair lending
• An optional independent test of your BSA/AML program
• Preparation for Fannie Mae MORA and Freddie Mac CORE reviews, and for state and CFPB exams

What the rules require

• Fannie Mae requires approved sellers and servicers to maintain internal audit and management oversight that is independent of the operations it reviews, with no shared reporting lines. Fannie Mae allows an exception for a company too small to keep audit separate from operations, if its audit plan explains why and how it controls the risk.

  Fannie Mae Selling Guide A4-1-01 (opens in a new tab)

• Fannie Mae requires a written quality control program with prefunding and post-closing reviews. The lender remains responsible for any QC work it outsources.

  Fannie Mae Selling Guide D1-1-01 (opens in a new tab) and A3-3-01 (opens in a new tab)

• Freddie Mac requires a written quality control program with preclosing and post-closing reviews. Sellers that produce 5,000 or more mortgages a year must keep any in-house post-closing QC independent of origination and underwriting.

  Freddie Mac Seller/Servicer Guide 3402.1 (opens in a new tab)

These summaries are general information, not legal advice. See the cited rule for the full text.

How it works

1. 1A 30-minute call about your company, your agency approvals, and what your warehouse lenders ask for.
2. 2An information request, followed by a one- or two-day on-site review of the whole operation.
3. 3A written report, plus your internal audit charter, risk assessment, audit plan, and schedule.
4. 4Targeted follow-up audits, typically two or three a year, each reported within 20 business days.

What you receive

• A written report on each review, delivered within 20 business days of the visit
• Practical recommendations, not just exceptions
• A distilled version of the initial review your warehouse lenders can use for their annual review

Why Garrett, McAuley

• Reviewers who have run and examined mortgage companies, not generalist auditors
• One review serves Fannie Mae, your warehouse lenders, and your board
• Recommendations aimed at profitability and efficiency as well as compliance

Who you will work with

• 

  Joe Garrett

  Co-Founder & Principal

  Joe Garrett has worked in banking and mortgage banking since 1977, mostly in FDIC-insured and OCC-regulated banks. He served on the boards of four banking institutions and as Chairman and CEO of two of them.

  LinkedIn
• 

  Michael D. McAuley

  Co-Founder & Principal

  Michael D. McAuley became a commercial banker in 1984, specializing in mortgage warehouse lending and commercial lending. He managed the warehouse lending business for Washington Mutual and JPMorgan Chase, and he has helped commercial banks set up, assess, and improve their warehouse lending operations.

  LinkedIn
• 

  Steve Stone

  Managing Director

  Steve Stone has spent his career in independent mortgage banking, as an entrepreneur and as a senior operating executive. He founded and later sold an independent mortgage banking company, and he has managed loan production, servicing, secondary marketing, MSR strategy, and technology.

  LinkedIn