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Who Are Those Behind-the-Scenes People at Your Mortgage Company?

Written by Posted On Monday, 28 September 2020 05:00

When you first begin thinking about mortgages, more than likely it’s your loan officer who you will have the most contact with. Your loan officer will prequalify you and quote interest rates and monthly payments along with an estimate of closing costs and the approval process in general. When you submit your loan application, the loan officer takes sort of a back seat as the file is prepared for processing. Not that the loan officer walks away and you never hear back, not in the least. It’s just that there are so many other people working in the background that you may never know much less speak to.

Your loan processor however is one person who you will speak to after loan submission. It’s the loan processor’s job to put the loan file together, order out various third party services and collect further documentation from you when needed. The loan officer will give you a list of what needs to be submitted along with your application. 

This list contains items such as your most recent paycheck stubs covering a 30 day period. The last two years of W2 forms and tax returns if self-employed. Bank statements will also be required to provide evidence there are enough funds to close on the transaction. The processor will order third party services and documents such as title insurance policies and property appraisals. Once the file is fully documented, it is handed over to the underwriter.

Your underwriter is the individual who will make sure the loan package that was submitted meets the guidelines for the selected program. The underwriter will review the initial decision provided by an automated underwriting system. This decision will itemize the things needed for a complete approval. If the list says there needs to be paystubs in the file covering a 30 day period and there is only one paycheck stub covering a 15 day period, the underwriter will send the file back to the processor to gather the additional items. You will not speak with the underwriter at all, but work with your processor to provide what is needed.

After the loan has been approved, the file moves to the closing department. The closing department will prepare the loan file for a digital delivery of the package to the settlement agent. The settlement agent is someone you will not only speak with but meet at your loan closing. Once the loan documents are signed, they’re returned to the lender for one more review.

At this stage, the lender has pulled funds from its credit line in order to fund the newly created mortgage. The individual who reviews the signed papers makes sure the settlement agent followed the lender’s instructions properly. Once the determination the settlement agent did follow the instructions properly, the lender will provide the settlement agent a ‘funding number’ which in essence is a digital key that unlocks the funds needed to create the new mortgage.

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David Reed

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor's Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. As a Senior Loan Officer and Mortgage Executive he closed more than 2,000 mortgage loans over the course of more than 20 years in commercial and residential mortgage lending. 

He has appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show. His advice has appeared in the New York Times, Parade Magazine, Washington Post and Kiplinger's as well as in newspapers and magazines throughout the country. 

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