A.2.1.1.7 Independence of QC Reviews and Reviewers

A. The QC review function must be independent of the Lender’s loan origination, processing and servicing functions, and may be accomplished in several ways. QC review functions may be performed by using:

1. In-house staff. Lenders may establish a special unit that is dedicated solely to QC. Staff performing QC reviews must not be involved in the day-to-day processes that they are reviewing.

2. Outside firms. MAP Lenders may use knowledgeable outside, independent firms to prepare the QC reviews.

   • Services provided by an outside firm must comply with the Department's QC requirements and must provide written reports to the MAP Lender’s senior management. The MAP Lender is responsible for ensuring these requirements are met.

• The firm working on the QC review may not be used by the Lender in underwriting MAP loans.

• Certified Public Accounting (CPA) firms may perform the QC review, which would be considered non-audit services. However, the same CPA firm cannot also provide auditing services for the MAP Lender since the CPA firm will be reviewing its own work, in part, which is a violation of the Independence standard of the Auditing Standards.

• Any agreement with the outside review firm must be in writing, state the roles and responsibilities of each party and be available for review by COB.