This excerpt taken from the RDN 10-K filed Mar 1, 2007.
3. Portfolio Quality Assurance (Risk ManagementMortgage Insurance)
Portfolio Quality Assurance (PQA) is responsible for ensuring that credit and related risks that impact the quality of our portfolio of insured loans, the quality of loans underwritten by us or our delegated lenders and the quality of critical data used within our business are assessed, investigated and communicated so that management can make informed decisions about loss prevention, risk mitigation, and appropriate corrective action.
PQA is responsible for ensuring that our underwriting procedures and guidelines (as well as those of lenders and the GSEs) are followed by service center, contract underwriting and corporate operational support personnel through a loan re-underwriting and auditing program. PQA also conducts risk-based reviews of our delegated underwriting business. The results of our reviews are used to improve the quality of the business the lender submits to us for insurance. Issues that are raised in our reports and not resolved within a time period acceptable to us could result in restriction or termination of the lenders delegated underwriting authority.
PQA also is responsible for executing a program of risk-based monitoring to evaluate the level of business channel and operational compliance with critical credit policies established by Mortgage Risk Policy, ensuring enforcement of credit policy and accountability on the part of the business and providing feedback to risk management for continual review and improvement of existing policies.
Recognizing that timely and accurate data are critical to the management of the mortgage insurance business, PQA also includes an information quality assurance function that identifies and recommends solutions for any significant credit-related information that does not meet internal or external customers expectations for accuracy, consistency, completeness, ease of use, or availability. System or data corrections, development of policies or procedures, standardization of business measures, training in the proper use of data, and the creation of tools to accurately communicate and report information are examples of the corrective actions taken as a result of our information quality efforts.