“While not required to become a loan processor, certification programs can help you understand the role of a loan processor better while gaining invaluable real-world experience.”
What Does a Loan Processor Do?
A loan processor plays a key role in the mortgage process by organizing and verifying all the information needed for an underwriter to make a loan approval decision. Here’s a detailed breakdown of what a loan processor does:
1. Review and Organize the Loan File
After a loan officer takes a borrower’s application, the file is sent to the processor. The processor ensures that all necessary documents—such as income verification, asset statements, credit reports, and property information—are complete and accurate.
2. Verify Borrower Information
The processor reviews the borrower’s financial details to ensure they meet lender and agency requirements. This includes:
Income verification: Pay stubs, W-2s, or tax returns.
Assets: Bank statements, retirement accounts, or gift funds.
Credit: Reviewing credit reports for accuracy and addressing discrepancies.
3. Order and Track Third-Party Documents
Processors coordinate with third parties to order:
Appraisals
Title work
Flood certifications
Verification of employment (VOE)
Homeowner’s insurance
They also follow up to make sure these documents are returned promptly and accurately.
4. Prepare the File for Underwriting
Once all verifications are complete, the processor organizes and submits the file to underwriting. Their goal is to ensure it’s “clean”—meaning it contains everything the underwriter needs to issue an approval without multiple follow-ups.
5. Manage Conditions After Underwriting
If the underwriter issues conditions (requests for more documentation), the processor works with the borrower, loan officer, and other parties to gather and submit those items quickly for final approval.
6. Coordinate the Closing
After final approval, the processor helps coordinate the closing disclosure (CD), ensures all figures match the loan estimate, and confirms all documents are ready for closing day.
In Summary
A loan processor acts as the project manager of the mortgage file—keeping all parts moving, ensuring compliance, and making sure the underwriter has everything they need to make a confident loan decision.
Written By: Bonnie Wildt
I have said it before and I will say it again and that is, do not believe everything you hear or read for that matter. In this particular instance I am referring to AUS Findings. I have had countless conversations with processors and loan officer who want to know why I am asking for documentation that the AUS findings have clearly stated wasn’t needed or worse, they can’t believe I am turning a loan down that has an Approve/Eligible. So here it is again and pay particular attention to the details because just because you have an Approve/Eligible or Accept doesn’t necessarily mean you have a done deal.