What Happens in Your Mortgage Loan Process?

So your Mortgage Processor called and wants updated paystubs and bank statements before you can get final approval on your homebuyer mortgage.  What’s a Mortgage Processor and why isn’t your Loan Officer calling you?  What is a normal time to get everything submitted?  These are great questions.  You should know who is involved in your mortgage decision process and how those decisions are made.

1. Loan Officer: 
   1. Loan officers meet loan applicants (you). 
   1. Loan officers ensure the application is completed correctly, and examine your financial records to figure out how much money you can borrow. 
   1. Loan officers do not underwrite the loan and do not make final loan decisions.
   1. Loan officers do determine good loan program options for your financial situation and can explain those options to you.
   1. Loan officers are responsible for locking your loan and for communicating when and why that lock can be made.

Once the application is completed and signed, and your financial documents are gathered by the loan officer, your application package may be passed along to a Mortgage Loan Processor or loan processor.

• Loan Processor: 
  • Your mortgage loan processor organizes your application and the documents you have submitted according to the loan program indicated by your loan officer. 
  • Your loan processor will request more documents If any are missing or incorrectly completed.  If you do not understand why a document is being requested again, ask your loan processor.  They may just need updated information.
  •  Usually, the loan processor will also order verifications from a 3^rd party, such as your employer or the IRS. 
  • The loan processor verifies the information on your application, organizes your documents and application into an application package and submits that application package to the loan underwriter for your lender.
• Appraisal:  The lender orders the real estate appraisal report. (a licensed appraiser’s professional opinion of value of the subject property, based on the sales of other houses with similar characteristics in the same market area).  If the appraised home value in a purchase transaction is lower than the loan amount, you may either need to renegotiate the purchase price or make a larger down payment on your home purchase.
• Title Exam:  Title exam and insurance is ordered on your behalf.  The exam will look at the chain of title to make sure the lender will be in first lien position and that the property can transfer correctly.
• Mortgage Loan Underwriter: 
  • Most loan underwriters use software developed by the lender to approve or deny your mortgage loan application.  
  • Sometimes the mortgage loan underwriter will conduct a manual loan underwrite and the process may take longer to complete.
  • The mortgage Loan Underwriter compares the information on the loan application and documents to the loan program.  He/she may conduct additional verifications to make sure you fit into the lender’s mortgage loan program guidelines.
  • The underwriter issues either a conditional approval, subject to stipulations or a full approval with no additional stipulations.  The loan processor must satisfy any listed “stips” before the loan can be cleared to close.  Though the underwriter is making the loan decision, the decision is based on the lender’s guidelines of which loans they will fund.
• Closing your Loan:  Once these steps are completed and the loan is found to fit into the lender guidelines, an attorney or title agency will be able to complete the process and schedule a time for you to sign your loan papers.  This is a great time to ask any questions you may have.  There is no rescission period on a purchase, so if anything on your final paperwork is not like the loan you agreed to, make sure you understand and accept the terms before you sign.  Do not let a few minutes’ delay prevent you from making a decision you will regret for decades to come.