Mortgage Processing 101

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

After another tedious week of over compensating for others I decided to share my thoughts on what exactly underwriting is looking for in a file in order to expeditiously clear it for closing. I know a lot of processors out there are thinking that we would just go a little greener, cut the documentation down to something that would fit into a normal file folder we might just be able to get it to the table within a couple of weeks and quite frankly if it was that simple we would but unfortunately the powers to be are looking for a little more than that.

The bottom line is this everyone, if you set your file up right in the beginning, it will pretty much process itself and instead of three pages of suspense items and 3 weeks in underwriting, the case will move from underwriting into closing with relative ease and this is how you do it.First, set the file up the right way as soon as you get it and make sure to ask the loan officer the right questions. Things like who the investor is, where cash for closing is coming from and who the title company is need to be determined when you begin processing.

Next, a complete review of the file should be completed to see what is missing, what you still need from the borrower or realtor needs to be addressed and a list compiled. You need to determine if you need additional paystubs, do you have the sufficient number of years where W-2 wage statements are concerned, are there 60 days worth of bank statements and do they demonstrate sufficient funds to close.

Address large deposits appearing on the bank statements, you will need a written explanation and complete paper trail. Read all the documentation in the file to determine that your year to date earnings are in line and that there are no unexplained deductions appearing on the paystubs. Calculate the income and make sure your ratio’s are in line, there is nothing worse than sending a file to underwriting that gets rejected because the income is not there, that kind of stuff needs to be addressed at a processing level.

Once the file has been completely reviewed, call the borrower and let them know what you need from them, ask them to email or fax it to you and then begin the other file work that is necessary to continue processing. Order your case number assignment, pull LDP, GSA work and order the appraisal. Make sure all of the information in your loan origination system is accurate. Pull assets from the bank statements, calculate the income and make sure your liabilities are correct. Run your ratio’s just in case there were any liabilities that the borrowers overlooked that could affect your ratio’s.

Finally, when you receive the appraisal and other documentation as requested from your borrower, review all of it once more just to determine that you do not need any additional information. If you have everything you need then get the case into underwriting. Before you submit your case, make sure all the information is correct. Review one at last time your AUS findings, make sure the numbers on your 1003 or LT make sense and that your final typed documents are error free.

If there is something unique about the file or you are missing a piece of important documentation, drop a note to the underwriter and let them know it will be forth coming and then get the case into underwriting. I guarantee you if you spend just a little time on the front end, getting the case into closing will be very easy and you will also achieve something personal which is industry respect. At last I will tell you that I come across processors every day, some of which I have a tremendous amount of respect for, others seem to just show up for the paycheck.

The processors that work hard, learn the business and constantly develop are the ones who move to the next level. 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)