Does the mortgage process overwhelm you? Do you wonder why you have to talk to so many people, like the loan officer, underwriter, and loan processor? It seems confusing, but it takes a team to underwrite and approve your loan.
The underwriter and loan officer play an important role, but the one person that holds it all together and makes the loan happen is the loan processor.
Here’s what you need to know about the key people involved in your loan process.
Loan Officers Originate your Mortgage
When you start the loan process, you’ll deal with a loan officer. He or she helps you choose the right loan program, and understand the rates and terms of the program you’re eligible for.
A loan officer helps you get pre-qualified or pre-approved for the right loan. You’ll provide your personal and financial information to the loan officer and he/she will run it through an automated underwriting system.
If you’re approved, you’ll move onto working with the loan process.
Loan Processors Work Behind the Scenes
Once you settle on a loan program, the loan processor takes over. You’ll hear a lot from the processor as he/she has questions or needs more documents (proof of your eligibility).
Loan processors do a lot. They are responsible for reviewing your information and filling in any missing information before sending your file to underwriting to get approved.
What do Loan Processors Need?
Loan processors need all the information that makes up your loan package. Any information you supplied on your mortgage application, you must prove. The most common documentation is the following:
- Paystubs covering the last 30 days of employment
- W-2s for the last 2 years from all jobs
- Tax returns from the last 2 years if you were self-employed or work on commission
- Bank statements for the last 2 months
- Proof of any other assets you’re claiming
- Contact information for your employer
- Contact information for your bank
Make Sure you Have Everything for the Loan Processor
The faster you have your documents for the loan processor, the faster your loan can close. Loan processors review each document carefully. They look for discrepancies and ask for explanations. They also call your employer or request a Verification of Deposit from your bank of anything seems ‘off’ on your bank statement.
Loan Processors Confirm your Information
Once the loan processor has your documentation, they verify everything. This may include:
- Calling your employer to verbally verify your employment
- Sending your employer a written Verification of Employment if there are any questions about your income, dates of employment, or any other employment detail
- Sending a written Verification of Deposit to your bank to verify your bank account details
If the underwriter has any question about your qualifying factors, he/she may ask the processor to get a Letter of Explanation from you.
An LOX is written documentation about a situation, such as a gap in employment, decreasing income, or a large deposit.
The LOX is an official statement from you explaining the situation and why it happened. You should include any documentation with it that proves your side of the story.
Next, Loan Processors Order the Remaining Certifications
To close your loan, underwriters need to know the home’s value and that the home is free of any liens.
Loan processors order the home appraisal to determine the home’s value. The appraiser goes into the home (depending on COVID regulations) and takes pictures of the interior and exterior. He determines the home’s value based on what he sees and the comparable sales in the area.
The appraisers puts together an official appraisal report which he sends to the loan processor. The processor’s job is to follow up on the appraisal if it’s delayed or to clear up any questions or confusion with the appraiser.
Loan processors order the title work to look at the chain of ownership. Does the seller have the right to sell the property? Are there any liens on the property?
The processor works with the title company to clear up any issues. If there isn’t a clear title, the processor finds out from the title company what you must do to clear the title. Underwriters can approve a loan to close without a clear title.
Underwriters need all this information to approve and close your loan.
Loan Processors Order your Closing Documents
Once the loan processor gets the green light from the underwriter, he/she gets your closing ready. The processor schedules the closing and works with all parties to make sure the necessary documentation, funds, and people are at the closing to make the loan happen.
It’s a delicate process that requires the cooperation of everyone involved. The processor is the center of the hub, helping everyone get on the same page to close the loan.
Loan Processors and Underwriters Differ
A lot of people work together to make your mortgage happen, but the loan processor and underwriter are the most important.
The loan processor gets all the details together so the underwriter can assess your risk and approve your loan. Without the processor, there would be a missing link between your loan officer and underwriter.
Work with your Mortgage Team Together
The key is to work together with your mortgage team. Find a loan officer who you relate with and can answer your questions, matching you with the perfect loan. Then work closely with the loan processor to get your documents in and approved so you can be on your way with an approved and closed mortgage loan.
Your loan processor is the glue that holds the process together. He/she is your contact person for all your questions and concerns. The processor can get in touch with the underwriter and the loan officer within seconds to address your issues.