I recently had a transaction where my buyer became a bit frustrated with the loan process. He’d applied for his mortgage loan through the loan officer he had been working with, and was starting to receive emails from other people at the bank who were asking about his application and asking him to supply further documentation. He didn’t know who these people were, as he’d only been in touch with his loan officer. And sometimes, they were asking for the same items he’d already provided to one of the others; no wonder it was frustrating!
It’s important to know what to expect as you go through the loan process and the people that you’ll be coming into contact with. I was going to describe the various people at the bank myself, but then realized that I should just go straight to the source! I asked Todd Beard, a great local lender with Marine Bank, to tell me about the various positions of the people you may interact with. Here are Todd’s words:
“Typically, there are 3 main people that are involved in the loan process from application to closing – Here is a short breakdown of each of those, and what they generally do:
LOAN OFFICER – The job of the Loan Officer is to go over your scenario and determine which loan options are available for you, and ultimately provide a Loan Pre-Qualification Letter to you that you could use when/if you decided to make an offer on a new home. The Loan Officer will get questions answered about the process as a whole, run payment scenarios, and give you an idea of the types of documentation required for the loan program being used. While the Loan Officer cannot actually approve the loan or process the loan, they would generally be the main contact person for you throughout the loan process.
PROCESSOR – After the loan officer meets with you and issues the Loan Pre-Qualification Letter, and you present a contract to purchase a new home, the Loan Officer will submit the application, purchase contract, and your documentation to the Processor. The main job of the Processor is to gather all the needed documentation for the file and make sure that the documentation matches what the Loan Officer has entered on your loan application. The Processor will also take care of ordering the appraisal on the new property and reviewing that to make sure there are no issues or required repairs when that appraisal comes in. The Processor will then assemble a complete file with all documentation and submit that to the Underwriter for final approval.
UNDERWRITER – The Underwriter is the person who will actually “approve” the loan. The job of the Underwriter is to review all the documentation that has been presented, making sure that the file meets the program guidelines for whatever program is being used for the loan. When the file reaches the Underwriter they are generally checking to make sure that there are no additional questions that surround the documentation that has been presented. After the Underwriter has reviewed the file and is satisfied that all questions are answered and that the file meets the guidelines for the loan program being used, they will issue a Loan Commitment Letter, which is essentially the final approval of the loan. If there is still any missing documentation, those items will be specifically listed on the Loan Commitment Letter.
Closing Department – After the underwriter issues the Loan Commitment Letter, the file is returned to the Process to await the actual closing. The Processor will then submit the file to the Closing Department who is then responsible for preparing all the various loan documents and getting those documents to the title company for the closing. The Closing Department will work with the title company to come up with all the final numbers for the file. Once those final numbers are determined, the Loan Officer would generally contact you and give you the exact amount of funds needed for the closing.
You would have most of their contact directly with the Loan Officer – The Processor would contact you occasionally, generally when tracking down any documentation that is missing from the file. You would generally never have any contact at all with the Underwriter – If the Underwriter needs additional information, they would have the Loan Officer or Processor reach out to the borrower to collect that information.”
If you’d like to ask Todd any further questions, or to begin the loan pre-approval process, email him at firstname.lastname@example.org or call 217-239-0131.
There may be issues that arise at each step of the loan process, outside of our control, some of which I’ll discuss in future entries. Most things can be resolved without affecting the closing date (the date that you become the owner of your new home). It helps to anticipate issues as best as possible and to have an experienced team (your lender and I) on your side.