Loan officers can assist in accelerating the underwriting procedure during periods of high mortgage volume by paying attention to a few straightforward steps when submitting a borrower’s loan information.
I was a mortgage underwriter for 20 years. I am aware of the steps necessary to quickly approve a mortgage loan from the viewpoint of an underwriter. For the past six years, this understanding has enabled me to become a top-producing loan officer. I believe that in order to better understand how we can become more efficient, we need to address the process and pipeline given the large volume of mortgages that many loan officers are handling right now. You will spend less time later on searching for missing information or fixing errors if you take a little extra time to get the file ready for the underwriting process.
Here are 3 straightforward methods loan officers can use to expedite the underwriting procedure, close more loans more quickly, and maintain more organization while doing so.
Loan Officer Hub blog
Posted in: Consumer Strategies
Loan officers can assist in accelerating the underwriting procedure during periods of high mortgage volume by paying attention to a few straightforward steps when submitting a borrower’s loan information.
I was a mortgage underwriter for 20 years. I am aware of the steps necessary to quickly approve a mortgage loan from the viewpoint of an underwriter. For the past six years, this understanding has enabled me to become a top-producing loan officer. I believe that in order to better understand how we can become more efficient, we need to address the process and pipeline given the large volume of mortgages that many loan officers are handling right now. You will spend less time later on searching for missing information or fixing errors if you take a little extra time to get the file ready for the underwriting process.
Here are 3 straightforward methods loan officers can use to expedite the underwriting procedure, close more loans more quickly, and maintain more organization while doing so.
Cover letters to move homebuyers to homeowners faster
Many loan officers, in my experience, pass up the chance to simply include a cover letter with loans they submit for underwriting. This step might seem simple and not essential to successfully underwriting a loan effectively, but I strongly disagree!
Processors and underwriters can more quickly spot anything out of the ordinary with the aid of a one-page cover letter that provides a clear summary of the loan with regard to the credit, assets, income, and appraisal. Most importantly, taking the time to explain any special aspects of the loan up front will save you time later. There is no need to reiterate the obvious, but please include the details that the numbers do not convey. Create a cover letter template once and use it over and over again.
When reviewing a loan file, confusion is the last thing an underwriter wants to encounter. By including a cover letter with each loan application, you can lessen the risk. I guarantee the underwriting team will thank you and value your efforts if you keep it tidy and organized.
Stay up to date on guidelines
Loan officers should always be current on program guidelines. Read the AUS reports and access the program guidelines for particular loan types, such as jumbo, construction/perm, and others, rather than relying solely on memory. When gathering information, be mindful of document expiration dates so you don’t need to ask your borrowers for more information before closing. Due to temporary COVID-19 guideline flexibility, many investors’ expiration dates were shortened. As a result, be aware of the most recent requirements and carefully review any documents you receive.
Getting usable documents makes the process go more smoothly and quickly. Dates on paystubs, bank statements, credit reports, and even year-to-date financial statements are all subject to specific guidelines.
A borrower’s file must contain accurate information in order for the underwriting process to move quickly. For instance, if the borrower is divorced, you must include the necessary divorce or separation documents in their file. If the mortgage borrower uses income from real estate owned (REO), you must conduct an income analysis, submit accurate tax returns, and provide all relevant documentation. And before submitting the loan file, you must provide the correct documents and review the dates if the mortgage borrower has a history of foreclosure or bankruptcy.
When providing loan documentation, loan officers who work with self-employed borrowers (SEB) face additional challenges. While accurate information is always crucial to the loan process, it can be challenging to calculate qualifying income for self-employed borrowers. Make sure to review each section of the 1003 and submit all paperwork necessary for the borrower’s circumstance.
Loan officers who spend the time to thoroughly examine borrower income will better set borrowers’ expectations and spare processors and underwriters the hassle of trying to determine the source of the initial income. Even if you’re not sure if your calculations are accurate, always include them in the file submission. MGIC has an excellent worksheet to assist with this. As a top-producing loan officer, I’ve also discovered that obtaining complete tax returns prior to preapproval speeds up the mortgage loan underwriting process.
Loan officers can expedite the underwriting process by incorporating these 3 steps. Start with small changes and adapt as needed. An important step in the mortgage loan underwriting process Finding ways to be more effective as a loan officer will facilitate a smooth underwriting process. More mortgage loans will be closed by loan officers who are organized in getting their loans ready for the underwriting process.
The thoughts and observations made in this blog are solely those of the author, Lorri Hoffman, and may not reflect those of Mortgage Guaranty Insurance Corporation or any of its parent companies, affiliates, or subsidiaries (referred to as “MGIC” collectively). The validity, dependability, accuracy, completeness, or applicability of any opinion, insight, recommendation, data, or other information contained in this blog are not represented or warranted by MGIC or any of its officers, directors, employees, or agents.
Lorri Hoffman, Senior Loan Officer – Movement Mortgage
For the past three years, Senior Loan Officer Lorri Hoffman has been ranked in the top 1% of all loan originators in America. The fact that Lorri’s customer service is unrivaled is more noteworthy than any awards or accolades, and she also won the prestigious “Move Up” award, which recognized her exceptional growth in the industry and put her at the top of the referral list for the most prestigious realtors in the market. Lorri takes pride in having a personal stake in the client’s success and working to build lasting relationships.
I believe that being knowledgeable about the market industry is very telling.
FAQ
Can a lender override an underwriter?
A lender override is highly unlikely. However, the lender might look for a different product and/or give the borrower advice on how to qualify going forward. If new information or an extenuating circumstance are present, the lender may also request re-underwriting of the application.
Can loan officers speak underwriting?
Even though you typically can’t speak with an underwriter directly, your loan officer should provide you with a clear explanation for the rejection. You only have a brief window of time to attempt to reverse the denial because it won’t be final until the lender issues a denial letter.
Do loan officers underwrite the loans?
Underwriter. When a borrower applies for a loan, a loan officer from a bank, credit union, or other financial institution makes the offer, whereas an underwriter evaluates the borrower’s application materials to determine whether they qualify for a loan.
What would make an underwriter deny a loan?
About one out of every ten mortgage loan applications is rejected by the underwriters. This frequently occurs as a result of the applicant’s excessive debt, spotty employment history, or low appraisal report. However, by being aware of the criteria an underwriter considers, you can optimize the appeal of your application.