QC Review Prior Clear To Close During Mortgage Process

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QC Review Prior Clear To Close During Mortgage Process

This BLOG On QC Review Prior Clear To Close During Mortgage Process Was UPDATED On September 5th, 2018

The mortgage application and approval process starts when borrowers submits all of their financial and credit information to the mortgage lender.

  • Information such as the following need to be processed by mortgage processors:
    • two years tax returns
    • two years W-2s
    • two months bank statements
    • signed mortgage application
    • signed disclosures
    • verification of rent and/or verification of mortgage
    • verification of employment
    • letters of explanations on credit inquiries and/or derogatory credit tradelines
    • other forms required by lenders

Role Of Mortgage Processor

All documents gets reviewed and crossed checked and processed by the assigned mortgage loan processor:

  • Once the processor compiles the file and submits it to lender’s underwriting department
  • Mortgage underwriter gets assigned to the file
  • Underwriter then underwrites loan application
  • If everything is good, the underwriter will issue a conditional mortgage approval
  • Conditional loan approval will have conditions necessary for underwriter to issue a clear to close

What Are Mortgage Conditions

Mortgage Conditions can be things that need to be reviewed and checked off by underwriters in order for issuance of clear to close.

  • Examples of conditions are the following:
    • title
    • appraisal
    • income verification
    • IRS verification
    • insurance information
    • updated bank statements
    • updated paycheck stubs
    • updated verbal verification of employment
    • other items that may need verification on what the mortgage loan applicant has listed on the mortgage application

Once borrowers submits all the conditions, the processor prepares file for clear to close. Underwriter checks off all of the items received to see if they can issue a clear to close. Most mortgage companies will have the underwriter issue a clear to close. However, there are some lenders where the file that has been underwritten by a mortgage underwriter needs to go through the company’s Quality Control Desk prior for the original underwriter to be able to issue a CTC.

Clear To Close

A clear to close is what the main goal is in the mortgage approval process.

  • A clear to close means that the lender is ready to prepare docs and fund the loan
  • Lenders have different policies on how they issue a clear to close
  • Many lenders allow mortgage underwriters to issue a clear to close once he or she approves all the conditions
  • However, other mortgage lenders have a QC Review process after the initial original underwriter signs off on conditions

How Does QC Review Process Work?

Not all mortgage companies has a separate Quality Control Underwriting Process.

  • A QC Review Prior Clear To Close process is when a separate mortgage underwriter reviews the file
  • In a way it is reviewing the work of the original mortgage underwriter
  • QC Review Prior Clear To Close Underwriters makes sure everything that has been checked off by original underwriter and all of the conditions are correct
  • In a way it is a second set of eyes
  • Once the QC Review Prior Clear To Close has been signed off, the lender can then give the thumbs up to the closing department to prep docs and schedule the home closing
  • However, the once the mortgage loan underwriter deems the mortgage loan application clear to close, it gets sent out for QC Review Prior Clear To Close underwriter

Role Of QC Review Underwriter

Depending on the mortgage lender, a QC Review Underwriter is often a different underwriter that cross checks the original underwriter’s work:

  • The QC Underwriter goes through everything the original mortgage underwriter has done to see that there are no errors
  • The QC Review underwriter often times will run a soft credit check pull to make sure borrowers has not incurred any additional debt
  • Also makes sure there are no fraud alerts issued
  • Once QC Review underwriter signs off on the QC Review, it goes back to the original mortgage underwriter for them to sign off on a clear to close
  • The QC Review process normally takes 24 to 48 hours

Again, not all lenders have a separate QC Review Prior Clear To Close Process. There are instances where the QC Review Process takes longer than 48 hours and can delay the mortgage closing. Borrowers who are getting the run around with a lender due to their QC Review and cannot get a clear to close can contact us at Gustan Cho Associates at 262-716-8151 or email us at gcho@gustancho.com. The Gustan Cho Team at Loan Cabin Inc. has no lender overlays on government and conventional loans and has no QC Review. We are available 7 days a week, evenings, weekends, and holidays.

Gustan Cho

www.gustancho.com

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