Learn the Processes:

	Pre-qualification This is the initial conversation I have with the borrower. The information I obtain is the borrower's income, amount of funds available for the closing costs and down payment and job history. I require the client allow me to pull a credit report so I can see what their credit scores and debt looks like. We discuss loan programs, how much they can afford and what will be expected at loan application. I always offer to fax a goodfaith estimate to them so they can see approximately what their monthly payment will be and the cash needed to settle. I tell them to call me when they have a specific property in mind, so I can run specific numbers.
	Pre-approval This process is especially needed 'in this current market. It is a combination of the pre-qualification and the items listed below ( Item I through 4). The pre-approval constitutes an approved loan contingent upon a ratified contract, appraisal, and a termite inspection.
	The Loan Application This happens once the borrower gets a ratified contract. I have most of the information in my computer from the pre-approval conversation, but always like to make sure the information is current. If the borrower has not done the pre-approval step, these are the items needed: One month's worth of current paystubs. W-2s for 2003 & 2004. If the borrower is self-employed, I need 2003 & 2004 1040's and a Profit & Loss year to date. 2 months bank statements on any account where assets are going to be verified. This would include a quarterly statement for 40 1 k, stocks, mutual funds or an IRA. I need these statements if any money is going to be used from these accounts for the purchase of the home. A copy of the ratified contract. Obviously, cases differ and additional information may be required. But these items are always needed. I order the Appraisal and then contact the Settlement Company informing them I am the Loan Officer working with this borrower. The Settlement Company requires the name and phone number of my Processor. They contact him/her once they know the settlement date.
	The Approval Process Now that the loan application has been taken, all disclosures signed by the borrower, the Appraisal has been ordered and the Settlement Company contacted, I send the loan file to my Processor. A complete file is sent directly from my Processor to Desktop underwriting (DU), usually within three days of the date of loan application. DU will give an answer within 24 hours of submission. Once the file is approved it is sent back to my Processor where she works on getting any conditions. (I.E. a verification of rental history). The file is sent to DU very quickly, because many times DU will not require additional information. I have the ability to check loan status via my laptop. Once a file has approval status, I fax a copy of the loan approval/commitment to the client, and both the listing and selling agent.
	Settlement The approved loan is sent by my Processor to our Settlement Department. There they work on the loan documents that will be signed at settlement. They know the location, time and date of settlement because they have been in contact with the Attorney's office. The loan package is sent out from our Settlement Department to the Attorney's office 24 hours before the closing date. At settlement the borrower signs all documentation prepared by the Attorney for the purchase of the home.

Copyright 2007 - Paul Massaro - All Rights Reserved