More often than not, by the time a file reaches the processor, the loan officer or branch manager has already determined where the loan will be sent for underwriting approval. However, there are times when out of necessity, the processor becomes involved in the loan placement process. If this is something you’ve never had to do before, it can be a daunting task. Following a few basic steps will help make this project a little easier:
1. First, review the loan file to make sure you have thorough knowledge of the borrower’s profile •Review the details of the credit report including the credit score, delinquencies, and public records •Pay attention to notes from the originator about the borrowers needs, unique situations, deadlines, or other limitations •Review income and asset documentation to determine if the file should be priced as a full, limited, or stated documentation file •Review the automated underwriting report to determine what programs the borrower is likely to qualify for. If none are available, make this a priority. It’s important to know what your preliminary conditions are prior to submitting a full file.
2.Next, select a lender and obtain a program matrix and pricing information. This information is usually available online, via fax-on-demand, or by placing a phone call to the lender. •When reviewing the matrix, be sure to refer to the guidelines that match your borrower’s credit score, mortgage/rental history, and loan-to-value (LTV) •When reviewing rate sheets, be sure to select the rate that fits the borrower and property profile -- loan amount, LTV, FICO score, and housing payment history. •Additionally, remember to factor in pricing adjustments for yield spread premium or backend points as well as an interest rate buydown. •Calculate the payment at the proposed interest rate to make sure that it does not exceed the maximum debt ratio allowed for the program. •Remember that the interest rate and LTV for reduced documentation and non-owner occupied deals may vary from a standard conforming loan. You may need to look at the pricing adjustment section for add-ons for high rise condos, 3-4 unit properties, and row houses.
3.Then, submit the file via the lender’s website or by fax. For online submissions, you should receive results within minutes. This data input function is easiest if you import your file from your origination software.
4.Finally, review your results to make sure these loan terms will work. Ask yourself: •Has the borrower’s needs been met (i.e., rate, payment, cash out, etc.) •Is the compensation for this loan in line with the broker’s requirements •Can the conditions be satisfied before the approval expires •Consult with the broker or loan officer regarding your results
Now you are ready to begin processing your loan file. Let your preliminary approval guide you from here. For more ways to stay on course with processing, visit our website at www.completemortgageprocessing.com.
FANNIE MAE AND FREDDIE MAC LEND A HELPING HAND TO HURRICANE KATRINA VICTIMS. Fannie Mae and Freddie Mac are encouraging mortgage professionals to spread the word about the type of relief that they are recommending to help victims of hurricane Katrina. Mortgage lenders and servicing companies have been instructed to advise borrowers of the various type of relief that is available to them including: •A 3 month suspension of mortgage payments •A reduced payment for up to 18 months •Temporarily discontinue reporting derogatory payments that are a result of a natural disaster hardship •Waiver of late fees and penalties Lenders and servicers have also been instructed to expedite the release of insurance proceeds so that borrowers may begin the rebuilding process. For more information visit www.fanniemae.com and www.freddiemac.com or contact your lenders directly.
+++++++++++++++++++++++++ QUESTION OF THE MONTH +++++++++++++++++++++++++
Q. I recently attended a mortgage training school and received a certificate. However, I’m still not sure what to do when I get a file in front of me for processing. Help!!!
A. First of all, congratulations on completing mortgage training school. You’re off to a great start! It’s normal to feel uncertainty at this stage. It will get easier the more hands on you are with actual files. Here are a few things you can do to make a smooth transition into the role of processor:
1. Study your company’s loan flow. Inquire about the steps in the process that don’t seem clear. Get an understanding of your role in each part of the process. This will help you recognize when things are not progressing the way they should. 2. Shadow an experienced processor through a few key phases of processing like loan setup, verifications, and clearing conditions. 3. Take notes that include examples of calculations and explanations for codes, acronyms, and pricing adjustments. You can refer to them when you’re on your own. 4. Listen closely and learn what’s working and what’s not working for other team members. Adopt effective techniques and stay away from ones that seem to keep team members in hot water or behind schedule. 5. Look for other refresher training opportunities offered by your employer. If none are available, utilize those offered by your lender or other mortgage associations.
If you are a contract processor, you may find value in having a mentor or coach. They can lend their expertise in helping you to develop tools to process more efficiently. You can also find specific examples of how to process a file in the Loan Processor In-A-Box™ workbooks for In-House and Contract Processors.
If you have already purchased our Loan Processor In-A-Box™ workbook or used our other training resources, we’d love to hear from you. Let us know what has helped and what you’d like to see more of. Leave a message at our Feedback line at 1 (800) 609-9006 x2128 or just click here to submit your comments online. You can also send us an e-mail to processinghelp@aol.com or fax us at (702) 543-5397.
