Internal Control Questionnaires and Verification Procedures

Loan Production — Policies and Procedures

1. Has the board or its mortgage banking committee, consistent with its duties and responsibilities, adopted written policies that govern:

   1. The types of loans that the bank will originate in-house (retail) and/or purchase from outside sources (wholesale)?

   2. The sources the bank will use to acquire loans?

   3. The underwriting standards and procedures for approving exceptions to written policies?

2. Is the operation and supervision of each facet of the production process sufficiently separated, e.g., underwriting and originations?

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