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Third-Party Contract Processing List for Gustan Cho Associates
what your MLO/LOA does before handoff from what you need the processor to explain happens after handoff.
It was a pleasure speaking with you. I am including my Administrative Assistant and Branch Operations Manager, Marga Jurilla, on this email so she can coordinate our processing workflow with your company.
We were referred to your company through Coast 2 Coast Mortgage Lending, LLC, and we are looking to establish relationships with experienced third-party contract processors who can work closely with our MLOs and LOAs on broker and mini-correspondent transactions.
Our Borrower Profile
A large percentage of our borrowers come to us through organic internet traffic and referrals. Many have previously been declined or have had difficulty qualifying with other lenders because of lender overlays, credit issues, or more complicated underwriting circumstances.
Our files can include borrowers with:
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Credit scores below 600, and occasionally down to approximately 500
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FHA or VA manual underwriting
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Outstanding collections and charged-off accounts
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Chapter 13 bankruptcy situations
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Recent late payments
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Compensating factors such as larger down payments or substantial reserves
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AUS Approve/Eligible or Accept findings where the overall credit profile still requires careful review
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High debt-to-income ratios
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Non-QM or other specialty loan programs
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Files requiring a wholesale lender experienced with borrowers who do not fit a traditional agency lending profile
Most of our borrowers are cooperative, and we generally have a strong conversion rate once we determine that they have a realistic path to mortgage approval.
Because of the type of borrowers we serve, we need processors who are experienced, hands-on, proactive, and comfortable working through complicated files rather than only straightforward conventional transactions.
Our Process Before the File Is Handed to Processing
We would like to coordinate our front-end mortgage process with your company’s requirements.
Our general workflow is as follows:
1. Initial Borrower Conversation
The MLO or LOA speaks with the potential borrower, discusses their goals and general financial situation, and determines whether there appears to be a potential mortgage option.
2. Secure Online Mortgage Application
The borrower is directed to our APPLY NOW link and completes the secured online mortgage application, which flows into ARIVE.
3. Application Review
The MLO or LOA reviews the application with the borrower to confirm that the information entered is complete and accurate.
This includes reviewing items such as:
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Employment
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Income
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Assets
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Housing history
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Liabilities
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Property information, if known
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Bankruptcy, foreclosure, collections, or other credit events
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Other information that could affect qualification
4. Initial Documents
The MLO/LOA reviews the documents the borrower has uploaded and requests any obvious missing documentation needed for the initial qualification.
5. Initial Credit Review
When appropriate, an initial soft credit pull is obtained and reviewed.
If the borrower appears to have a viable mortgage opportunity, the MLO/LOA proceeds with the required authorization and orders the tri-merge credit report through Advantage Credit.
6. Loan Structuring and AUS
The MLO/LOA reviews the credit report, structures the proposed loan, calculates qualifying income and liabilities, and runs the appropriate AUS when applicable.
For files that require manual underwriting, the MLO/LOA identifies that the transaction will need to follow manual underwriting requirements.
7. Pre-Approval
Once the MLO determines that the borrower has a reasonable path to approval and the necessary information has been reviewed, the appropriate pre-approval letter can be issued.
8. Purchase Contract
The borrower shops for a home and, once an offer is accepted, forwards the fully executed purchase contract to the MLO/LOA.
File Handoff to Your Processing Company
This is the point where we would like your company to explain exactly how you want the file handed off to your contract processor.
Please provide us with your preferred procedure once the borrower is under contract.
For example, we would like to know what you expect the MLO or LOA to complete before assigning the file to your processor, including:
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Required submission or processor intake form
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Required borrower documents
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Executed purchase contract
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Credit report
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AUS findings
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Income calculations
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Loan program and lender selection
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Loan estimate or disclosure status
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Required ARIVE milestones
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File naming or document stacking requirements
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Processor assignment procedure
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Any processor notes or loan summary you require
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Any additional documentation you want collected before handoff
Our goal is to give your processor a clean and organized file rather than handing over an incomplete application and expecting the processor to reconstruct the loan.
At the same time, once a complete file is handed off, we want to clearly understand where the responsibilities of the MLO/LOA end and where your processor’s responsibilities begin.
Please Explain Your Process After Handoff
Please provide the step-by-step process your company follows after receiving the file.
We would especially like to understand how your processors handle:
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Reviewing the initial file for completeness
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Requesting missing documents
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Preparing the file for lender submission
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Registering or submitting loans to wholesale lenders
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Reviewing lender disclosures and compliance requirements
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Coordinating appraisal orders when applicable
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Following up on title, insurance, HOA, verification, and third-party documentation
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Monitoring lender conditions
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Reviewing conditional approvals
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Sending condition requests to the borrower
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Working with the MLO/LOA on difficult underwriting conditions
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Submitting conditions back to underwriting
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Obtaining final approval or Clear to Close
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Coordinating with closing, title, settlement agents, real estate agents, and the borrower
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Following the loan through closing and funding
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Post-closing responsibilities, if any
We also want to know how communication is normally handled.
For example, does your processor communicate directly with borrowers for routine documentation and conditions, or do you prefer those requests to go through the MLO/LOA?
How frequently does the processor provide status updates?
We want to establish these expectations upfront so borrowers receive consistent communication and there is no duplication between the processor, MLO, and LOA.
Experience With Difficult Loans
Because of our borrower profile, please tell us about your company’s experience processing:
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FHA manual underwriting
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VA manual underwriting
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FHA loans with credit scores below 580
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Borrowers with significant collections or charge-offs
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Chapter 13 bankruptcy files
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Recent derogatory credit
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High-DTI borrowers
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Non-QM loans
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Brokered transactions
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Mini-correspondent transactions
We are particularly interested in processors who understand that an unconventional credit profile does not automatically mean the loan cannot be done.
Wholesale Lender Experience
Please send us a list of the wholesale lenders your processors work with most frequently.
If possible, please identify lenders where your team has significant experience with:
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FHA and VA manual underwriting
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Lower-credit borrowers
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Chapter 13 bankruptcy
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Non-QM lending
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High-DTI borrowers
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Difficult or exception-based transactions
We want to match the processor’s experience with the appropriate lender whenever possible.
Company Information Requested
Please also send Marga the following:
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Your company’s processing policies and procedures
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Your standard mortgage processing workflow
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Processor submission/intake sheet
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Current fee schedule
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States your company currently supports or is authorized to process loans in
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Processor licensing information where applicable
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List of wholesale lenders you regularly work with
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Contact information for escalation or management
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Standard turnaround expectations
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Your preferred MLO/LOA-to-processor communication procedure
Marga will use this information to establish a consistent internal procedure for our MLOs and LOAs so that every file being assigned to your company is submitted according to your requirements.
Our objective is simple: the MLO and LOA should properly qualify, structure, document, and organize the loan on the front end, and the contract processor should then be able to take a complete file through lender submission, underwriting, conditions, Clear to Close, and closing in an organized and proactive manner.
We believe establishing those responsibilities clearly from the beginning will make the process easier for the borrower, processor, MLO, LOA, real estate agents, and everyone involved in the transaction.
Thank you, and we look forward to learning more about your company and your processing procedures.
Gustan Cho NMLS 873293
Gustan Cho Associates
A DBA of Coast 2 Coast Mortgage Lending, LLCI made this detailed enough to become your standard processor onboarding letter, while still putting the responsibility on each processing company to tell Marga exactly how they want files handed off and how they operate after submission.
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