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The Start of The Mortgage Process-Role of Mortgage Processor
We have covered the qualification and pre-approval process. To qualify and pre-approve a borrower and/or co-borrowers, they need to complete the secured online mortgage loan application.
In the application process, the online mortgage application has fields to upload certain documents that is required in order for the MLO to proceed with qualifying and pre-approving the borrower.
MLOs do not have to ask tons of documents at this stage of the mortgage process. Initially, ask for the following documents during the application process:
- 30 days of the most recent paycheck stubs for the borrower and/or co-borrower.
- Two years of W2s for hourly and salaried wage earners (We will cover self-employed borrowers, borrowers with irregular income, and borrowers with multiple part-time jobs on a later thread).
- 60 days of the most recent bank statements
- If borrowers do not have two months of bank statements, then have them go to their bank teller, ask the teller for a 60-day bank statement printout, have the teller to stamp it, sign, and date it.
- Need all pages including blank pages.
- Copy of front and back of driver’s license and social security card.
- Source of down payment and closing costs. Gift funds are allowed. Bank or investment account showing funds for the down payment and/or closing.
Recap of The Mortgage Loan Application and Pre-Approval Process
The MLO will direct the mortgage loan applicant to the link where they can pull a tri-merger credit report and pay for it. Most mortgage companies now are directing borrowers to pay for the tri-merger credit report.
In the past, the MLO normally pulled the tri-merger credit report, and the cost of the credit report was charged at closing. However, with the credit reporting companies increasing a tri-merger credit report from $28,00 per borrower to $120.00 or more, many lenders could not absorb this type of high cost and later find out the loan applicant does not go ahead with proceeding with the loan.
By paying for the tri-merger credit report, the loan applicant will get a copy of the tri-merger credit report, and a second copy will be sent to the MLO. With the tri-merger credit report, the MLO then runs the mortgage loan applicants through the Automated Underwriting System (We will cover and discuss the automated underwriting system on a later MLO Training e-Learning Thread). With an approve/eligible per AUS, and a thorough review of the tri-merger credit report, the MLO will issue a pre-approval letter. The borrower will then interview and hire a buyer’s real estate agent and start shopping for a house.
Executed Real Estate Purchase Contract
After the homebuyer finds the perfect home to purchase, the homebuyer will consult with the real estate agent on how they will make a purchase offer. The realtor will guide the buyer and go over the recent comps, the housing market (is it a buyer’s or seller’s market), seller concessions, contingencies, earnest money, and tentative closing date.
The homebuyer’s realtor and the listing real estate agent will go back and forth and negotiate the terms of the purchase offer. In both buyer and seller are motivated, they will come to a compromise and come to terms.
Once the homebuyer and home seller comes to terms with the offer and contingencies of the purchase contract, each side signs and date the real estate contract. A copy of the real estate contract will be submitted to the mortgage loan originator. In states, like Illinois where homebuyers are normally represented by a real estate attorney, the attorney gets a copy of the contract. The MLO now goes to work.
MLO Assigned the Homebuyer to a Mortgage Loan Processor
Once the executed real estate contract is submitted to the mortgage loan originator (MLO), the MLO will assign a mortgage loan processor to the buyer’s file (We will cover the type of mortgage processors an MLO and/or Lender uses in a later thread: In-House Processor vs Third-Party Contract Processor). An experienced knowledgeable mortgage processor is key in going through a smooth, stress-free, mortgage process without delays or a last-minute mortgage loan denial.
The mortgage processors job is to prepare all documents are up to date, there are no missing pages, income, debt, and asset information have supporting documentation, divorce docs if applicable, child support docs if applicable, bankruptcy docs if applicable, letters of explanation if applicable, and any items that the mortgage loan underwriter will or may question.
The mortgage processor’s role is to submit the entire mortgage loan file of the borrower, which includes labels, supporting docs, letters of explanation, and well organized for the underwriter to zip through each line item and issue a conditional loan approval with as little conditions as possible. There are cases where a mortgage processor has the file in such a disarray where the underwriter kicks it back without looking at it where the file is in suspense. In the next MLO Training e-Learning Thread, we will cover going over a conditional loan approval, how the conditions get cleared, and how the mortgage processor submits the file back to the mortgage loan underwriter for a clear to close.
The Loan Estimate: The Old Good Faith Estimate
The mortgage processor is in charge of issuing the Loan Estimate. The Loan Estimate needs to get disclosed within three business days of the official mortgage loan application by law. We will cover the Loan Estimate in detail in a later MLO Training e-Learning Thread.
Role Of Mortgage Processor During The Mortgage Process
gustancho.com
Role Of Mortgage Processor During The Mortgage Process
Role Of Mortgage Processor is to oversee the overall mortgage process from the time the borrower applies until the underwriter issues the CTC
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1 Reply
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I want to share an informative guide i use as a reference guide that has helped me to use it as a checklist. MLOs need to realize that the processor needs to be extremely careful of not submitting documents that is not required or not asked for by the underwriter. The big reason is a mortgage underwriter cannot UNSEE WHAT THEY SAW.
https://gustancho.com/documents-required-for-mortgage/
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This reply was modified 5 hours, 25 minutes ago by
Sapna Sharma.
gustancho.com
Documents Required For Mortgage Processing and Underwriting
All documents required for mortgage processing and underwriting needs to be complete including blank pages to avoid delays in CTC.
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This reply was modified 5 hours, 25 minutes ago by
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