| The
Loan Process
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The loan process is the most important aspect
of a mortgage loan
The explanation below is a general sequence of events that takes place
during the processing
These descriptions are meant to give you a general idea of what is required
to go from loan credit application to closing
1. The first step – the loan
application
2. AU – Automatic Underwriting
3. Submission of Loan Package
4. Processing Begins
5. Verifications
6. Completion of Processing
7. Final Underwriting Decision
8. Processor to Schedule Closing
As might be expected, the first step in obtaining
an AU (automatic underwriting) is to provide a complete credit application
(also called a “Fannie Mae 1003”) or “Uniform Residential
Loan Application”. This is the most important document in any mortgage
loan package.
It must be accurately and fully completed in order to be able to obtain
timely loan decisions.
Application needs to disclose verifiable information, so Loan Processor
will be able to confirm it
Unverifiable information, misrepresentations or omission of facts will
create a cause for denial
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It’s great to have a system that generates
a loan decision that will allow us to issue a 24 hours loan commitment,
but Broker needs to understand that all loan decisions are based on the
information they provide in the 1003.
If errors, misrepresentations or omissions occur, it will create a faulty
loan decision.
Questions or any concerns can be addressed to HELP@LOANSINC.US and we
will respond within just a few minutes, during business hours from 10
AM to 5 PM
Once we have analyzed the AU and within 24 hours, we’ll proceed
to generate a fourteen-day written loan commitment that Broker receives
via e-mail and that includes all loan disclosures.
At this point Broker has 14 calendar days to deliver all conditions contained
in the notification, thereafter loan will not be available in the terms
that were disclosed in the loan commitment.
Please note that some times you may be quoted more than one option.
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Submission of Loan Package must be made via a
traceable courier such as USPS – FEDEX – DHL – UPS,
etc. It’s Broker’s responsibility to protect and make sure
that all documents reach Loans Inc.’s office. Loans Inc. takes no
responsibility for any lost package that may contain sensitive information.
The most important issue is to make sure that you are submitting every
single condition that was requested in the Loan Commitment, so your file
goes to processing without any delays. If your Loan Package is not fully
complete, we’ll email a notification and place your file aside until
all conditions are received.
Loan Processing doesn’t start until all conditions are received
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Once we’ve received your Loan Package we
proceed to assign the loan processor
Processing begins when every single data contained in 1003 is about to
be verified via different channels such telephone calls, mail, public
records, data providers obtained from Internet sources, etc.
These are the first five steps taken by Loan Processor.
1. First step for the processor is to merge loan into the processing system.
2. Order title work, appraisal and survey
3. Check existing insurances on property and have them endorsed with mortgagee
clause
4. Do verifications as per loan commitment instructions
5. Issue a Loan Status Report within 72 hours from the date processing
started
Loan Status Report contains all details of any information missing, wrong,
inaccurate, omitted, discrepancies between original and final application
and any other issue considered appropriate by Loan Processor. Loan Status
Report is e-mailed to Broker and we expect a response within 24 hours.
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Loans Inc. requires as standard procedure a great
deal of quality control for all loans, and Loan Processor must keep record
of all names, telephones and sources used to determine accuracy of all
information in 1003
Most verifications are made by calling the party
in question to confirm that the information provided is correct and in
some instances, when information cannot be obtained via normal channels,
we mail a written request. Verifications vary according to type of loan
transaction. Unverifiable information is not accepted in any loan
Here is a list of the most common requirements
for processing:
Full Doc:
Two (2) full years of verifiable employment within the same line of work,
profession or business
Last two (2) years W-2, last 30 days worth of Y-T-D pay stubs and/or verbal
verification of employment VOE
Self-employed requires two (2) years 1040s along with current P&L,
we may also require 1120, 1065, or K1
Self-employed requires to obtain written verification of income via IRS
(form 4506) prior to final decision
Bank Statements:
Last 12 bank statements can be used as a full doc, provided borrower is
either self-employed or 1099 earner
12 months average of deposits are taken into consideration as total income
minus expense factor as follows:
30% for off-site business – 20% for out-of-residence business –
0% for 1099 earners
Stated Income:
Income will not be verified, still income must meet reasonableness test
for the line of work performed. Two years within the same line of work,
business or profession will be verified
No Ratio:
Income is not to be verified, nor it can be disclosed on credit application
and debt ratios are not calculated. Two years with the same employer,
profession or business will be verified
Sisa: Income and assets must
be disclosed, but are not verified
Two years within the same line of work, profession or business will be
verified
Nina: Income and assets are not to be verified, nor it
can be disclosed on credit application
Two years with the same employer, profession or business will be verified
Hard Equity: Income, assets are
not to be verified, but Borrower's employment will be verified prior to
loan closing
Verification of Employment For Non-Verifiable
Income:
Salaried Borrowers:
Current position and dates of employment must be verified for two years
either through a verbal VOE obtained by Loan Processor and/or provide
an original letter issued by employer showing date hired, title, position
and probability of continued employment written on employer’s letterhead
Self-employed Borrowers:
Existence of the Borrower’s business over two (2) year period of
time as evidenced by a copy of business license, or CPA / Registered Accountant
letter showing type, position, length of business and for how long he/she
has prepared Borrower’s tax returns. Letter must be signed, dated
and written on provider’s letterhead.
Professionals:
Must have copy of two years license issued by Florida Department of Business
and Professional Regulations
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Consists of going thru a check list to make sure
loan is in full compliance with Federal and Florida regulations, Company's
policy as well as with our Quality Control Program
Once all aspects have been checked, Loan Processor
will take file for a final senior underwriter’s decision.
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Loan has reached the final step to obtain all
conditions cleared and sign-off by senior underwriter
Underwriter will analyze that all documents that were processed are satisfactory
Appraisal will be checked in three different ways to obtain Fair Market
Value for the area
Underwriter may or may not require additional conditions if some new discoveries
were found as a result of our Quality Control Program. If additional conditions
are required, file will go back to Loan Processor for review, correction
or changes that may be necessary.
If a clear to close (CTC) is obtained, your Loan
Processor will simply complete the final step …schedule closing.
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At this point processor needs to make sure survey
and all necessary insurances are properly endorsed and in full effect
as the date of scheduled closing.
Closing Documents can be only obtained upon evidence
of all insurances required.
Closing documents must be ordered 48 hours
prior to actual closing date.
Mail-away documents must be ordered 72 hours prior closing date.
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