Critical Defect Rate Declines Five Straight Quarters, Ending 2023 at 1.53%, Per ACES Mortgage QC Industry Trends Report

Defect rate declines 19.18% year-over-year, illustrating the vast improvement in lenders' loan quality efforts

Published June 19, 2024

DENVER, Colo., June 20, 2024—ACES Quality Management® (ACES), the leading provider of enterprise quality management and control software for the financial services industry, announced the release of its quarterly ACES Mortgage QC Industry Trends Report covering the fourth quarter (Q4) and calendar year (CY) of 2023. The latest report analyzes post-closing quality control data derived from ACES Quality Management & Control® software.

Notable findings from the Q4 2023 report include the following:

"Building on the gains made in late 2022, mortgage lenders improved loan quality in both Q4 2023 and for the year overall," said ACES Executive Vice President Nick Volpe. "However, persistent adversity in the form of interest rates and affordability challenges only emphasizes the need for lenders to remain vigilant and protect the integrity of existing loan production."

Findings for the Q4/CY 2023 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 overall critical defect rate for Q4 2023 dropped to 1.53%, among the lowest rates observed since this report's inception. Given five straight quarters of decline, it's evident lenders are prioritizing loan quality in the current market to preserve as much revenue as possible," said Trevor Gauthier, CEO of ACES Quality Management. "The market downturn led to operational staff cuts for many lenders, and those reductions certainly impacted QC departments. Lenders' ability to consistently drive down their critical defects in that environment speaks to the power of ACES to help lenders manage loan quality and mitigate risk in any environment."

The Mortgage QC Industry Trends Reports are available for download, free of charge, at

Join ACES EVP, Nick Volpe and ACES President, Phill McCall on July 17th for their QC NOW webinar as they take a deeper dive into these analytics and how it aligns with the current state of the industry and how to best navigate through the volatile financial landscape. Register here for the webinar.

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:

Unlike other quality control platforms, only ACES delivers Flexible Audit Technology®, which 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 or call 1-800-858-1598.

Media Contact

Lindsey Neal | Depth for ACES Quality Management

(404) 549-9282 |

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