When you buy or Refinancing a house, there are many moving parts and tons of paperwork. The loan processor is the main person who carries the process along. If you are getting ready to apply for a mortgage, here is what you need to know about working with a loan processor.
What is a loan processor?
When you apply for a home loan, you will start by working with a loan officer or mortgage broker. But after your application is submitted, the next step is handed over to the loan processor (sometimes called the mortgage processor). A loan processor, like a loan officer, is employed by the company that originates the loan.
The loan processor is essentially the liaison between the borrower and the underwriter, says Matt Weaver, vice president of mortgage sales at CrossCountry Mortgage in Boca Raton, Florida. “The processor is one of the most important pieces in the entire loan process and home purchase,” he says.
That’s because, says Weaver, processors are “high-touch” with customers. The loan processor is the main point of contact for the homebuyer when it occurs. Document submission time. In other words, the borrower will likely have a lot of back and forth with the loan processor, as it is the job of the processor to gather all the things the underwriter needs.
What does a loan processor do?
A loan processor handles convenience and verification All paperwork and documents Between the customer and the underwriter, says Wendy Stockwell, vice president of operations support and product development at Ambres Home Loans in Middletown, Rhode Island.
Here is a breakdown of the important responsibilities of some loan processors:
Reviewing your application. The loan processor will monitor all financial documents submitted by you during the initial application, including your application form, bank statement, tax return, and other income and property documents. If nothing is missed or needs clarification, the processor will contact you.
Is verifying your information. Stockwell says, in addition to paperwork from you, loan processors must also verify your information. “Specifically, verification of employment and income, and if necessary, confirmation of assets available to complete the transaction,” she says.
Supplementary documents requested. Later in the process, if the underwriter requests additional information or has questions, those requests will go through the loan processor.
Receiving reports from third parties. The loan processor also runs your credit report, orders home appraisals, and works with title, escrow and insurance companies.
In short, the loan processor is there to ensure that all temporal boxes are checked in a timely manner. If the processor is organized and efficient, it can help ensure a smooth process.
Why is a loan processor important?
Looking at december 2020 Genesis Insight Report ICE mortgage technology shows that it takes an average of 58 days to close a home loan, having a reliable loan processor can improve the overall customer experience. “Technology cannot replace a loan processor. It is critical to the human touch process,” Stockwell says.
That’s why loan processors must develop good rapport with borrowers and establish the right expectations, so they can help them get through the sometimes tedious and lengthy process.
In addition, a loan processor who is familiar with lending requirements and standards can spot anything problematic and reach out to you before the underwriter gets involved, which can help avoid delays . This can be as simple as displaying an error on your forms, or the underwriter’s apprehension will lead to questions about the gaps in your employment history.
When a loan processor is included?
Typically, lenders will start by working with a loan officer to find the best loan program for their needs. Once the borrowers have submitted the loan application, the loan processor is added to the mix. Some loan officers can quickly attach processors to applicants to make necessary disclosures, says Stockwell, while Stockwell can handle them himself.
Either way, once the application is in and the underwriting process begins, the loan processor will usually be the main point of contact for borrowers until the underwriting is completed.
Loan Processor vs. Underwriter: What’s the Difference?
An underwriter is someone who conducts an in-depth review of the loan application on behalf of the lender to see if you meet the lending requirements. The underwriter is an expert on risk assessment who ultimately decides whether the loan can proceed. As such, it is important that the underwriter does not have direct contact with the borrower, Stockwell says. “It protects the integrity of the underwriter so there is no undue influence and they are providing credit judgments based solely on the information provided to them,” she says.
To ensure this separation, the loan processor works with the borrower and underwriter.
How to work well with a loan processor
- To complete your home loan process smoothly, submit clean and legible copies of your paperwork and respond to follow-up questions as soon as possible.
- Discover the most efficient way to communicate and share documents with the processor, whether by text, email, phone, or fax.
- Do not interrupt the loan-closing process by changing jobs, do anything that will negatively affect your credit (such as opening credit cards), or large savings withdrawals.
- Avoid taking out your frustrations on the loan processor. Be friendly and courteous, even when you deal with a lot of paperwork.