Getting Files Submitted

Written By: Bonnie Wilt-Hild
Senior DE Underwriter & NAMP Instructor

As an underwriter for a regional bank, I work with both retail staff as well as our wholesale business partners. Underwriting both types is always interesting not just because of the type of business you come to expect from each company or retail staff but also because of the manner in which the cases are presented to underwriting. In short, I can always tell if a particular company gives their processors enough time to completely work a case or if the processors are under a lot of pressure to get cases into underwriting immediately.

How do I know this you ask, very simple, the processors that are allowed an appropriate amount of time to actually process the loan usually provide a complete case that has been examined for ratio’s, credit and things of the like and generally receive a loan approval with minimal conditions. Processors that are rushed typically end up with a suspense, 30 conditions and often times after all of that work, end up with a case that isn’t approvable. Time wasted on a case that is not approvable is time taken from a case that is.

Now, I do realize that this blog is not going to change anything for the processors that are rushed and for the most part feel overwhelmed and frustrated under their current working conditions. But hopefully, it will give you some strategies that might help you process faster. More and faster, something that every processor hears regularly, is actually achievable if you know how to set up a file. I am sure you are thinking that you have been setting up files forever and are not quite sure what that has to do with getting into underwriting faster and more complete and the answer to that is everything.

I like to say that if a file is set up the right way it will ultimately process itself. So far this concept has held true at least for me and the processors that I have trained in the past. I will tell you that I do still occasionally process, close and post close (has everything to do with a short attention span) and I still use this theory when I process. When you try it your first thought will be is that it takes longer to set a file up but you will also notice that you can get it submitted and closed a lot faster. Ok, so how you ask. It is really important to do a complete review of the file when it hits your desk and answer all of the questions that seem to slow us down during submission.

Make sure you know the case type, who the investor is, determine if it’s locked and at what rate and who the title company or escrow attorney is. Next would be the review. When completing this piece to determine what you are missing you want to address the following:

Review the application and ask 1) Is the application completed and has all information as required been filled out by the borrowers 2) Is it signed and dated and has it been disclosed properly 3) Has the declarations and government monitoring information been completed 4) Where is the cash for closing coming from and is the asset information completed. 5) Who is the borrower’s landlord if a verification of rent is needed. 6) Does the application demonstrate a two year employment history for all borrower’s. 7) If the case is FHA or VA, do you have the addendum to the application and is it complete and signed by the borrower and loan originator. Next you want to review the disclosures to determine that you first have them all and secondly if the borrower needs to be provided a revised disclosure for any reason. You also want to recalculate the loan amount and make sure it is accurate that way you don’t need to deal with re-disclosure and any subsequent 3 day delay should something be incorrect.

Once you have completed the application and disclosure review, you next want to review the supporting documentation provided to you by the borrower to determine that all of the information as present in the application has been verified. Make sure that you have 1 month of the borrowers most recent paystubs supporting the income as disclosed on the 1003. You will also want the W-2 wage statements for the most recent two years. Review this stuff to make sure that the borrower’s year –to- date earnings make sense and that there are no deductions appearing that require an explanation. You should also recalculate the income just to make sure you come up with the same numbers that the borrower was qualified with.

Next look at the borrowers bank statements or asset account statements, make sure you have at least two months covering a 60 day period. Review the account activity to see if there are any large deposits that need to be sourced or if there are any withdraws or deductions that appear to be additional liabilities which are not reporting on the borrower’s credit report and make sure you have sufficient funds to close. If gift funds will be used, determine if you have a gift letter, evidence of the transfer of the gift and donors ability to give the gift.

Finally, review the borrower’s credit report. If there are any accounts that are demonstrating late payments in the most recent 24 months you will want to request an explanation for these as well as for any inquiries appearing within the most recent 90 days. If accounts do not have a sufficient number of months reporting or have not been updated within the most recent 4 months, realize that you are going to need a credit supplement for these accounts as well as for any accounts that are not showing a minimum monthly payment. Review the public records and collection information to determine if anything needs to be paid off or if you need to ask the applicant for evidence that it is paid in full. Also review the contract of sale if your case is a purchase and make sure you have all required addenda, remember the fewer the conditions the better.

Once you have completed your review and have a handle on what you are missing proceed with setting up the case in your LOS. Update the LOS with all of the information as demonstrated by the supporting documentation in the file and continue to update as new information is requested and received to make submission less time consuming. Next complete your 10 day letter to your borrower or call them, let them know all of the items you need from them in order to complete processing and ask that they email or fax it to you as soon as possible. Order your appraisal, case number assignment, LDP/GSA information as well as submit the loan to AUS.

As information is received from the borrower and you update your LOS remember to resubmit to AUS at that time to avoid last minute crisis. Also order your VOE’s and VOR at this time as well as any other information you will need from third party sources to complete processing. Once done, create an index card suggesting a date when you should have all that has been requested, I would say within 48-72 hours and place the card with the appropriate date card in your tickler file that way you don’t have files sitting around not being worked on. If you don’t receive the information in the time period you allotted, call the borrower or third party providers and ask where it is.

Once everything requested has been received, review it, update your LOS and complete your processing file. Print your submission documents and check them for accuracy. If all is in order send the case to underwriting and hopefully you will receive a loan approval with very little if any conditions. Order the items you need the day you receive the approval so that you are not overwhelmed at the end of the month trying to clear several loans at one time. Get them back to underwriting and relax while the case is being cleared to close.

I am sure for most of you this is pretty elementary stuff but for others I hope it is helpful. Believe it or not there was a day that a processor was really expected to close 40-50 loans a month without breaking a sweat. I can remember closing 70 with a little overtime. I guess the key is organization and of course requesting everything you need the day you set up the case. Once done you can generally move on to the next case and the case after that while the processed cases work themselves. Good luck and here is to looking forward to underwriting cases that I don’t have to condition for 30 items. Happy Processing!

About the Writer. As an NAMP staff writer, Bonnie serves as a senior instructor for FHA Online University as well maintains a full-time job as Senior DE Underwriter for a major banking institution. If you would like to become a writer for NAMP, please email us at: blog@mortgageprocessor.org.

SOURCE: Published by NAMP Publishing Group, a division of the National Association of Mortgage Processors (http://www.MortgageProcessor.org)