Defect rate increases from historic low as underwriting pressures, shifting borrower profiles and market volatility test lenders’ quality control processes
DENVER, Colo. /Massachusetts Newswire – National News/ — ACES Quality Management® (ACES), the leading provider of enterprise quality management and control software for the financial services industry, today announced the release of its quarterly ACES Mortgage QC Industry Trends Report covering the first quarter (Q1) of 2025. The latest report analyzes post-closing quality control data derived from ACES Quality Management & Control® software.
Notable findings from the Q1 2025 report include the following:
* The overall critical defect rate rose 12.93% to 1.31%, ending a two-quarter improvement streak.
* Income/Employment defects increased 42.5%, reclaiming the top spot at 22.99% of all critical defects.
* Borrower and Mortgage Eligibility defects surged 328.57% quarter-over-quarter, while Credit defects rose 11.96%.
* Assets, Legal/Regulatory/Compliance, and Appraisal categories posted significant improvements.
* Refinance defect share increased despite a drop in review volume, while purchase defect share declined.
“The rise in critical defects this quarter underscores how market volatility and operational pressure can impact loan quality,” said Nick Volpe, executive vice president at ACES Quality Management. “At the same time, we’re seeing that lenders who invest in automation and proactive quality control are making measurable improvements, particularly in underwriting and compliance.”
Findings for the Q1 ACES Mortgage QC Industry Trends Report are based on post-closing quality control data derived from the ACES Quality Management and Control® benchmarking system and incorporate data from prior quarters and/or calendar years, where applicable. All reviews and defect data evaluated for the report were based on loan audits selected by lenders for full file reviews. The Mortgage QC Industry Trends Reports are available for download, free of charge, at https://www.acesquality.com/resources/reports.
About ACES Quality Management
ACES Quality Management is the leading provider of enterprise quality management and control software for the financial services industry. The nation’s most prominent lenders, servicers and financial institutions rely on ACES Quality Management & Control® Software to improve audit throughput and quality while controlling costs, including:
* Over 70% of the top 20 independent mortgage lenders;
* 7 of the top 10 loan servicers;
* 11 of the top 30 banks; and
* 3 of the top 5 credit unions in the United States.
Unlike other quality control platforms, ACES Flexible Audit Technology® gives independent mortgage lenders and financial institutions the ability to easily manage and customize ACES to meet their business needs without having to rely on IT or other outside resources. Using a customer-centric approach, ACES clients get responsive support and access to our experts to maximize their investment. For more information, visit https://www.acesquality.com/ or call 1-800-858-1598.
Learn More: https://www.acesquality.com/
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NEWS SOURCE: ACES Quality Management. Story was sourced from a press release issued by Send2Press® and used with permission. View the original story at: https://www.send2press.com/wire/aces-q1-2025-mortgage-qc-industry-trends-report-reveals-early-signs-of-loan-quality-risk-amidst-mounting-market-pressures/
