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Contract Mortgage Processing
Can anyone tell me more about contract processing? I do not know how contract processing works and want to know how this concept will benefit my home buyer. I have been a real estate agent and managing broker for 25 years and have worked with dozens of loan officers over the years and never hear of such thing. Is it better for real estate agents to refer clients to mortgage brokers without contract processing? Do real estate agents connect with contract mortgage processors? Who pays for contract processing? Are contract mortgage processors competent and experienced? I think processing is the most important step throughout the mortgage process. Thank you in advance.
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3 Replies
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These are good questions.
Processing is very important to the process of getting to the finish line and is a service that is provided at a cost to the client in most cases even when working with a retail bank.
Here’s the difference between working with a contract processor and a processor for a bank or even a broker that keeps it in house so to speak. Banks and staff people in a internal capacity are on a salary as a base and then they may get a small bonus based on quality and volume of loans closed. If the processor isn’t receiving much or becomes satisfied with the money, they make they don’t have much incentive to work or make themselves available on evenings and weekends. Contract processors however only get paid if the loan closes. They get paid in a similar manner as you, so they are more committed to being engaged and available because of this. Of course, this blanket statement will always have an exception. Not everyone out there fits this statement but as a general rule this is what happens.
I hope this helps. I prefer working with contract processing. I’m also able to pick who I want to work with and build my own team. This isn’t available normally in the banking or internal processing options.
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Great information on contract processing, Mr. Burg.
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Okay, let’s explore the details of contract mortgage processing so that you, as a real estate agent, and your home buyers can benefit from it.
What is Contract Mortgage Processing?
Contract Mortgage Processing occurs when professional independent mortgage processors are contracted to process mortgage applications on behalf of a particular lender. Such people work not permanently for the lender but as independent contractors commissioned to perform specific tasks. They complete loan applications and all the required documents to enable the borrower to contact the lender.
Benefits for Home Buyers
Willingness to Contract Home Loan Processors With Contract Processing Wages: Many professionals have simultaneous exposure with various lenders, so they ultimately lead or are led to contract processing, which results in faster application responses and lowers the chances of bottlenecking loans.
Flexibility and Reduction of Ties: To prevent being limited to their set service scopes, contract processors have contracts that entitle them to deal with different lenders offering different services for different clients.
Fewer Rejections: Most contract processors have in-depth knowledge of that particular type of mortgage and experience working in that department, which can solve possible issues while applying for a loan.
Real Estate Agents and Mortgage Brokers
In particular, referring clients to mortgage brokers can still be helpful for a real estate agent. However, suppose you have a professional contractor whom you can trust. In that case, you can step up the specifics of the services you offer to your clients by ensuring their applications go through flawlessly.
More often than not, real estate-supplying agents can offer contract mortgage processing services to the supplying contract if they are only related to the servicing contract. This will make it easier for your clients.
Payment for Contract Processing
When accepting a mortgage loan, the lender usually repays the contracting processor as part of the mortgage fees. However, sometimes, the reverse occurs, whereby the borrower incurs the above cost. Hence, it is good to say or make them clear early to avoid any conflicts that could arise later.
Competence and Experience
There are contract mortgage processors with more experience than others and those who could be more competent. It is best to conduct thorough research on whichever processor you intend to engage several people with. Check for their reviews, ask for referrals, and look at their history in the business.
Purpose of Processing
You are correct that processing is an important stage in the mortgage finance operation. A good processor can greatly assist in ensuring that all relevant documents are well prepared and submitted on time, which determines the speed of loan approval.
To conclude, contract mortgage processing is a great help in the closing process of the mortgage loan, helping to bring speed, professionalism, and individual approaches. As an experienced real estate agent, engaging the services of contract processors will improve your client’s satisfaction and facilitate the closing activity of the transaction. Always ensure you work with reputable processors to protect your service standards.