Home Loan Processor: Your Best Friend When Applying For A Home Loan

In this article:

What does a mortgage processor do and what does it mean when your loan is “transferred to the processor?” “

Once you and your loan officer choose a mortgage and begin your application, a loan processor will likely take over. He or she can perform many functions, including:

  • Entering your request information into the lender’s software system
  • Order credit reports, ratings, title work and other services
  • Inform you of the subscription requirements and help you meet them

Depending on the lender, a loan processor may be the invisible person who creates a loan file and keeps it on track behind the scenes, or your main point of contact throughout the mortgage application process.

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What Does a Mortgage Processor Do?

You will likely meet with your processor soon after prequalifying for your home loan. That is, after your loan officer or mortgage broker has helped you choose a mortgage product, determine an interest rate, and possibly pull your credit report.

Your next step is to complete a home loan application. Some loan officers do this on their own, often using a laptop and automated underwriting software (AUS). This process may include checking your credit.

Alternatively, your loan officer can hire a mortgage processor to take your complete application, entering it into the lender’s system.

Related: How to Close Your Mortgage Faster

And your loan officer or processor will likely print out a mortgage application file and go through it with you, explaining what disclosures mean and making sure you understand and are comfortable with what you are signing.

Next, your processor will need to ask your employer, bank, and others for checks to back up your documents and statements. Processors often open escrow, order mortgage insurance policies and flood certificates, complete appraisals, obtain title insurance, and create an organized file to the lender’s very strict specifications.

Automated Subscription Systems (AUS)

Most mortgage programs can be purchased electronically. They assess your information about your debt, income, and credit and take one of four determinations:

  • Approve, which means as long as the documents you bring corroborate what you are claiming on your loan application and the property meets the lender’s guidelines, you can probably close.
  • Refer, which means there are gray areas that need to be reviewed by a human underwriter
  • Refer with caution, which is almost certainly an application denial unless the software obtains incorrect information, as could be the case with identity theft
  • Out of scope / ineligible, which simply means you are not following program guidelines. For example, the amount of your loan may be greater than the maximum allowed by the program

The software also generates a list of documents that the lender must provide to save the information provided on the application. It is the job of the processor to obtain this documentation from you. He or she may need to adjust the request if the information does not exactly match the documents.

Suppose you state that you earn $ 4,657 per month. But processor calculations from your pay stubs show $ 4,557 per month. Your processor should therefore update the application and resubmit it, just to make sure that the change did not impact your approval or the lender’s requirements.

Dealing with underwriters

Your processor will likely take on many tasks that you will never know anything about. An underwriter may ask for proof that your business is legitimate, for example. The processor can simply obtain copies of your county business license without asking you to bring them in yourself.

Related: What Does “Subscription” Mean? (dealing with loan conditions)

Note that no lender allows consumers to contact insurers directly. They could never do their job, and they also have to be impartial. Your processor or loan officer will always be your intermediary.

If you have questions about the status of your mortgage application, your processor may have more details than your loan officer. He or she can be your main point of contact. It doesn’t put you off with an “inferior” employee. This means that you are connecting with the person who has the information you need.

Working with your mortgage processor

The main function of the processor is to make things as easy as possible for the underwriter, thus increasing your chances of getting a good result.

This means that he or she is working on your on behalf of. Do not disrespect this valuable employee by ignoring requests for documents, explanations or other items. Return the phone calls and avoid these people any tirade about why you shouldn’t have to show your divorce decree / proof of residency / canceled checks / anything.

Processors don’t make lending decisions. But they can affect those decisions, and difficult customers yelling at them or calling a dozen times a day can cause them to miss an important detail. Or maybe stop them from working later to move your file faster. Few processors work on commission, so extra effort on your part does not usually translate into extra pay for them.

Be cooperative, grateful, and kind. It might help you with your loan approval, and a little good karma never hurt anyone.

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