The critical defect rate for U.S. mortgages climbed again in the third quarter of 2025, marking the third consecutive quarterly increase as lenders grappled with documentation challenges and leaner staff amid a shifting market.According to data released Wednesday by ACES Quality Management, the overall critical defect rate stood at 1.79% during the third quarter, an 18.5% increase from the previous quarter’s 1.51% rate.
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