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Underwriters either approve or deny the loan package that the mortgage-origination company submits. Underwriters are the only people who can issue a loan approval. Contrary to what many brokers/originators believe, automated underwriting systems (AUS) only give recommendations. Underwriters can add further conditions to AUS findings. Don't be surprised if you run automated underwriting with unverified loan data, send in your file based on that data and then end up with an additional 12 conditions, not including the closing conditions.
Closers generate the closing package and review the closing conditions with processing to ensure that all closing documents are in order. Some companies draw their own closing docs. Keep in mind that the closer usually comes from the lender.
The three Rs
So where do things go wrong? The most-common reasons for errors in the loan process are improper prequalification, incomplete 1003s and incomplete GFEs.
If you follow the three Rs of processing, then nine times out of 10, you will enjoy the processing stage of the loan process. The three Rs of processing are:
Read. Read all forms and infor-mation, including the sales contract, income docs, assets docs, credit report (line by line in its entirety), property documentation (warranty deed, survey, insurances, prior title policy) and appraisal, to name a few. Focus on missing signatures, pages, dates in the origination documentation and inconsistencies in the timeline, such as if the loan was written on a Monday and given to processing on Friday. By catching errors early, you can save yourself hours of extra work, headaches and heartaches.
Run the numbers. Recalculate every number after taking the application. Every time new documentation comes in, rerun the numbers to make sure the ratios are still in line with the program guidelines, if applicable. Of course, if the loan is no-income or no-doc, ratios aren't required.
Record. Document everything, including every task and conversation pertaining to a file. Record dates that you requested and received items such as appraisals, verifications, payoff, insurances and the title in your loan-origination system or in the loan file. Take notes and time/date-stamp all telephone conversations with all parties involved, not just with your borrowers. Use this as a tool for your timelines. These notes will be your savior if you encounter any problems with the closing.
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