This BLOG On Mortgage Processing And Underwriting Leading To CTC Was UPDATED And PUBLISHED On April 23rd, 2020
Most mortgage companies have different ways of the ways they process mortgage loans.
I have worked for several different mortgage companies in my career as a licensed mortgage loan originator:
- Every company I have worked with have different roles where the mortgage processor plays
- Some mortgage companies will have the mortgage loan originator accumulate all of the paperwork from the borrower
- All loan officers reviews borrowers documents and them provides them to mortgage processor
- The mortgage processor will then make sure that the documents provided by the loan originator are complete
- After reviewing thoroughly, the processor will then submit it to the mortgage underwriting department
- A mortgage loan underwriter gets assigned to the mortgage file
- The mortgage underwriter will then go over every document
- The underwriter will condition a list of items that are missing on a conditional mortgage loan approval
- Here is when the competency of the mortgage processor comes into play
- I have seen conditional mortgage loan approvals with a list of over 60 plus conditions
In this article, we will discuss and cover Mortgage Processing And Underwriting Leading To CTC.
Mortgage Processing After Conditional Approval
Here are some examples of conditions where the mortgage underwriter will ask for:
- Copy of drivers license, copy of social security cards
- Many times mortgage processors will submit drivers licenses and/or social security cards that are not legible and the underwriter will condition for that
Missing pages from bank statements:
- Many times a mortgage processor will condition new and updated bank statements
- This is because pages are missing from bank statements or bank statements are not legible
Mortgage Documents Required To Process Loan
- Missing pages on bankruptcy paperwork if applicable, missing pages from divorce decree if applicable, tax returns not signed by the borrower and/or borrowers, or just missing complete documents
- Incomplete title and insurance information
- Updated bank statements and paycheck stubs
- Issues with the home appraisal report
Letters of explanations with regards to credit inquiries, late payments, prior bad credit.
Why Some Mortgage Companies Close Most Of Their Loans While The Competition Does Not
Mortgage Processing at some companies is different than any other mortgage company I have worked for.
A typical mortgage company has the following processing system:
Mortgage Loan Originator will collect most of the documents and turn it in to the mortgage processor.
- Mortgage processor will check off the item of the documents that are required
- Once the mortgage processor seems it is complete submits it to the underwriter
- The underwriter will issue conditional mortgage loan approval with conditions
- The file gets back to mortgage processor
- Mortgage processor will give the condition sheet to the loan officer
The loan officer gets conditions from the borrower and turns in to processor and then turns in to mortgage underwriter.
- Underwriter reviews file and issues another set of conditions
Mortgage Processing Leading To Clear To Close
When a mortgage underwriter turns issues a conditional mortgage loan commitment, the conditions need to get cleared:
- Once the list of conditions are cleared, there should be a clear to close
- Unfortunately, many mortgage companies have mortgage underwriters that issue complete new sets of mortgage conditions after the initial conditions have been satisfied
- This is not the right protocol
This is what delays mortgage closings and drives everyone crazy.
Layers Of Management Delays Home Loan Closings
The ideal mortgage company is under the watch of experienced mortgage industry professionals such as the following:
- Mortgage Underwriters
- Underwriting Director
- Underwriting Managers
- QC Underwriting Review
- Chief Compliance Director
- Mortgage Processing Team
How To Avoid Stress During Mortgage Process
There are systems where its mission is to avoid last-minute hiccups where it turns into delays.
- The management staff of a great mortgage banking realizes the importance of meeting the home buyer’s closing date
- Customer service-oriented lenders realizes lenders can affect people’s lives, whether it is the lives of the home buyer or home sellers plus their families
- Changes are always being implemented at reputable mortgage companies to make mortgage processing the very best of the best and be the industry standard
- One of the mission’s at great mortgage banking firms is to avoid last-minute denials often common at other mortgage companies
- This is accomplished by going through a rigorous pre-underwriting process by Mortgage Experienced Mortgage Processors
They will check, double-check, triple-check for potential mortgage conditions prior to submission to the underwriting department.
Pre-Underwriting Mortgage Processing
Many mortgage companies have launched an intensive pre-underwriting program:
- This is when the mortgage processing team under the watch of experienced processing managers thoroughly scrubs each mortgage loan application
- Their goal is to have as little mortgage conditions as possible once the mortgage underwriter issues a conditional mortgage loan approval
- The main goal is to get the mortgage application as neat, organized, and complete as possible
This is so the mortgage underwriter does not list dozens of conditions and/or kicks it back or puts the file in suspense.
Dangers With Submitting Incomplete Documents
Sloppy files are all reasons for mortgage approval delays:
- Incomplete documents are the reasons for last-minute mortgage loan denials
- New rules implemented by many mortgage companies
- This is due to new mortgage regulations to get title and homeowners insurance information during the mortgage processing stage instead during the mortgage approval process
- Once a conditional mortgage loan approval is issued by a mortgage underwriter, the goal is to have as little conditions as possible
- The goal is to clear up those conditions within 48 hours and have the mortgage file re-submitted for a clear to close
- Many aggressive mortgage companies are gearing to be the best mortgage company in America
- Young aggressive expanding mortgage companies spare no expense in hiring the most talented mortgage professionals in the industry
When a file is submitted to underwriting and assigned to an underwriter at a reputable mortgage company, you can rest assured is coming back with a mortgage loan approval with little to no conditions due the aggressive intense pre-underwriting process.
Testimonials And Reviews
Like many shares of large national mortgage companies, larger national mortgage companies has its fair share of bad reviews and testimonials.
- However, borrowers have to understand and keep in mind that the reason large mortgage banking companies have bad reviews and/or testimonials
- It is not because of the mortgage company but due to the individual mortgage loan officer
- The mortgage company itself cannot control its loan officers with how they service their clients
- Some loan officers may not return phone calls in a timely manner and that is one of the most common complaints
- When these borrowers get upset, they do not target the individual loan officer but the mortgage company the loan officer is associated with
Fortunately, with bad reviews and testimonials comes good reviews.
Borrower Reviews For A Job Well Done
Here is a recent complimentary letter from a satisfied borrower to a loan processor:
I just wanted to say how happy I am that we have Gianna Dilla of Gustan Cho Associates as our processor. We aren’t closed yet and we’ve had a couple of hiccups. But I feel like she has gone over and beyond the call of duty to get my family and me in our new home before Christmas which is really important to me. She’s kept me informed of the entire process and has provided great customer service! Words can’t express how grateful I am for all of her hard work and long hours she’s put in to get this deal closed.
Katrina Campbell, Coral Gables, Florida USA