2025’s Survival Strategy? Building a QC-Centric Culture (Sponsored by ACES Quality Management)
Sharon Reichhardt is the executive vice president of operations at ACES Quality Management. With decades of industry experience, Sharon helps businesses strategically leverage quality control. Contact her at sreichhardt@acesquality.com.
Watch ACES’ recent QC Now Webinar, “Strategies for Embedding Loan Quality into Organizational DNA,” with guest speakers Hilary Holloway and Yari Mercado.
The mortgage industry is at a pivotal moment as it grapples with shifting regulatory requirements and a leadership transition at the Consumer Financial Protection Bureau (CFPB). Following the challenges of economic volatility, shifting regulations and evolving consumer expectations in 2024, the need for a robust and comprehensive quality control (QC) program has never been more evident. With high stakes tied to compliance, risk mitigation and customer trust, mortgage lenders and servicers must embed quality into every facet of their operations.
2025 Outlook: Why Quality Control Matters Now More Than Ever
While 2025 brings some optimism with anticipated declines in interest rates and moderate GDP growth, challenges remain. Regulatory agencies like the CFPB are expected to heighten their focus on fair lending and borrower communication. Yari Mercado, QC Compliance Manager at Pacific Residential Mortgage, highlighted the stakes: “The mortgage industry is heavily regulated, and staying ahead of compliance updates, fair lending laws and anti-money laundering requirements will be crucial. It’s not just about checking boxes; it’s about ensuring long-term operational resilience.”
While the CFPB’s role will almost certainly change under new leadership, the government’s responsibility of protecting consumers will remain, underscoring the need for mortgage professionals to focus on QC as a stabilizing force. Mortgage lenders and servicers must adopt best practices in compliance, fair lending/servicing and fraud prevention to mitigate risks and stay competitive.
A proactive QC program is critical for ensuring success in the mortgage industry, offering key benefits that address risk, compliance and trust. Identifying errors early in the origination and servicing processes helps mitigate costly repercussions and safeguards operational integrity. Furthermore, adhering to state and federal regulations minimizes the risk of fines, reputational damage and disruptions to operations. High-quality loans, achieved through robust QC practices, inspire confidence among investors and regulators, fostering stronger relationships and long-term trust.
Embedding Quality Into the Organizational DNA
To stay ahead of the curve, organizations must cultivate a culture of quality that transcends regulatory checkboxes and becomes a shared value system. Don Weaver, Quality Control Manager at myCUmortgage, emphasized, “Quality control isn’t just about catching mistakes–it’s about being proactive, ensuring that issues don’t escalate, and fostering collaboration across the loan lifecycle. With tools like ACES, we’ve been able to ensure continuity and consistency from start to finish.”
Strategies for Success
Adopting strategic initiatives is paramount to building a resilient and compliant mortgage operation in 2025. By leveraging advanced technologies, fostering collaboration, and maintaining a steadfast commitment to compliance, lenders and servicers can embed quality into the fabric of their organizations. Here are key strategies to achieve a culture of excellence in quality control.
Leverage Data Analytics
Predictive analytics can highlight trends such as rising delinquencies and borrower hardships. Hilary Holloway, director of quality control at Cardinal Financial Company LLP, noted, “We use predictive analytics to spot trends early and take corrective action. By integrating data from systems like ACES, we gain actionable insights to make better decisions.”
Focus on Compliance
Keeping pace with evolving regulations requires regular updates to QC policies and robust monitoring systems. ACES Managed Questionnaires pre-populate standard questionnaires with dynamic questions to increase loan review speed while ensuring compliance.
As Mercado observed, “Regulatory oversight is increasing, and staying ahead means adapting our processes before new rules fully take effect. Early revisions to internal QC policies are critical to maintaining compliance.”
Invest in Technology
Innovative tools like ACES Flexible Audit Technology® have become indispensable in streamlining the QC process. ACES Managed Questionnaires enhance loan review efficiency by pre-populating questionnaires with dynamic questions, ensuring compliance while saving time.
“The audit configurations in ACES have been a game changer for us,” Mercado shared. “They allow us to focus on what truly matters and reduce inefficiencies.”
Enhance Training Programs
Ongoing education is key to staying agile. Resources like the ACES Compliance NewsHub offer insights into emerging risks and best practices. Weaver also highlighted the importance of targeted training.
“Using monthly updates from ACES as training tools has been invaluable,” he said. “It keeps new staff informed and helps seasoned staff stay up-to-date with the latest changes.”
Foster Collaboration
Quality cannot thrive in isolation. By centralizing QC auditing, reporting, communication and action planning inside ACES, QC teams can provide their organizations with a window into the QC process to create a better understanding of QC’s role and, ultimately, a shared sense of responsibility for maintaining loan quality.
Holloway emphasized, “Transparency and partnership are central to our QC efforts. By fostering strong relationships across departments, we ensure alignment and build trust.”
ACES CONNECT® enhances the communication capabilities of the ACES platform by facilitating secure collaboration between QC departments and other areas of responsibility inside (or outside) the organization to ensure real-time, around-the-clock access to QC insights.
Building a Sustainable Culture of Quality
Embedding quality into organizational processes is more than just meeting compliance requirements—it’s about fostering a mindset of continuous improvement. As Holloway points out, “Quality control isn’t about pointing fingers. It’s about creating a culture where everyone feels empowered to play a meaningful role in delivering quality and improving outcomes.”
To achieve a sustainable culture of quality, organizations must focus on implementing several key steps. Standardizing QC practices through pre-funding and post-closing reviews is essential for identifying and addressing defects early in the process, ensuring a high standard of loan quality. Adopting a proactive mindset is equally important, as it allows organizations to anticipate risks and implement solutions, paving the way for long-term success. Finally, leveraging advanced tools such as real-time compliance dashboards enables organizations to gain actionable insights, streamline processes and stay ahead in a competitive and heavily regulated environment.
Servicing presents unique challenges, from managing borrower assistance programs to addressing loss mitigation complexities. Reflecting on her organization’s focus for 2025, Holloway stated, “Fair servicing practices are a priority, especially as we work to prevent abuse and ensure transparency in borrower communication and payment processing.” Again, standardizing QC processes in servicing provides similar benefits regarding early identification of potential compliance or loan quality issues. Automation extends the value of early detection by enabling servicers to take quick action to resolve issues before they materially impact the performance of the servicing asset.
Conclusion
The evolving mortgage landscape demands more than reactive QC measures. By embracing innovation, fostering collaboration, and prioritizing technology-driven practices, lenders and servicers can navigate 2025’s complexities with confidence. As Holloway succinctly said, “When we approach quality control with transparency, respect and proactivity, it’s not just about meeting standards—it’s about creating trust and driving continuous improvement.”
(Sponsored content includes material submitted independently of the Mortgage Bankers Association and MBA NewsLink and does not connote an MBA endorsement of a specific company, product or service. For more information about sponsored content opportunities, contact Bill Farmakis at bill@jlfarmakis.com or 203/834-8832.)
