DENVER, Colo., Nov. 18, 2025 — 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 second quarter (Q2) of 2025. The report analyzes post-closing quality control data derived from the ACES Quality Management & Control® software.
Key findings from the Q2 2025 ACES Mortgage QC Industry Trends Report include:
- The overall critical defect rate increased 15.27%, rising from 1.31% in Q1 2025 to 1.51%.
- Appraisal defects surged 156.5%, while Borrower/Mortgage Eligibility defects more than doubled to 15.87%.
- Income/Employment defects improved 19.7%, falling from 22.99% to 18.45% of all critical defects.
- Loan Documentation and Insurance defects declined 32.6% and 25.2%, respectively.
- Purchase defect share decreased to 73.96%, while refinance defect share climbed to 26.04% amid increased cash-out activity.
- Conventional loan quality improved, while FHA and VA findings rose modestly.
“Although the overall critical defect rate increased for a second straight quarter, the situation is nuanced,” said Nick Volpe, executive vice president at ACES Quality Management. “The rise was mainly in specific categories such as appraisals and eligibility-related areas. Meanwhile, other key underwriting areas saw notable improvements. This mixed performance demonstrates the importance of continuous monitoring and targeted quality control efforts.”
Findings for the Q2 2025 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. With ACES’ AI-powered capabilities, audit teams can translate complexity into clear insights and accelerate performance. Using a customer-centric approach, ACES clients get responsive support and access to our experts to maximize their investment. For more information, visit www.acesquality.com or call 1-800-858-1598.
Media Contact
Lindsey Neal
Depth for ACES Quality Management
(404) 549-9282
lindsey@depthpr.com