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Why are the three Rs so important? After the broker or originator completes all the steps to prepare a borrower's loan application, the loan is ready to move into the next phase -- loan processing. Each loan must be processed before it is sent to the lender for underwriting.
The processor's job is not easy. Data verification involves a lot more work than meets the eye. The loan processor is a detective and must be knowledgeable of all loan programs offered to a borrower. Processing validates, organizes and collates the data. It then structures the file into a presentable loan package for the underwriter.
The quality, integrity and presentation of the package are what make a loan desirable to underwriters. Underwriters should be able to navigate through the loan file easily. Any questions, comments or concerns about the file should be provided to the underwriter in a cover letter placed on top of the loan package.
It is essential to be realistic with your timelines and track all ordering and receiving of loan documents to maximize loan-processing efficiency. Use the 30-day rule as a guideline: Once a file is originated and ready for processing, it should take no more than 30 days to close. The sooner, the better, but you don't want to exceed 30 days unless you can document your reason. Be aware of your bottleneck areas, and don't make the same mistakes twice. For example, if it is taking four to five days to get title work, find a new title company -- unless there are problems with the title itself.
The world of processing is intriguing. Every loan is different, and no loan is ever the same. That's the best part.
Marian DeBonis is owner of CyberSpace Financial and a mortgage trainer at CyberSpace Financial Mortgage School. The school is licensed by the state of Florida to teach post continuing education. DeBonis has been a licensed mortgage broker in Florida since 1991 and is also a licensed real estate agent. Contact her at email@example.com or (954) 724-4591.
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