Like a doodad on a factory assembly line, a mortgage application goes through many processes before it becomes an approved loan. The typical loan requires 3 mortgage professionals and an AUS (automated underwriting system) to complete.
Why is this important to know? Borrowers are caught off guard when the nice loan officer lady that helped them with their application hands them off once approved. Confused, borrows don’t know who to turn to with which questions. Knowing what part of the loan process the officer, processor and underwriter handle will minimize confusion down the road.
Officer: The loan officer is typically the first representative borrowers interact with. They are there to speak on the loan products, determine which are best for the borrower’s situation, quote rates, and assist with the loan application (also called the 1003 form“10-o-3”). They will also run credit and prequalify borrowers.
Processor: The loan officer will then pass the file on to the loan processor. They prepare the paperwork for the underwriter. They double check all the numbers and ensure that the Is are dotted and all the Ts are crossed to put the borrower in the best position to be approved quickly and smoothly. The borrower will probably spend more time with their processor than they do with the officer.
Underwriter: Although very important in the transaction, borrowers will typically never hear from the underwriters. Underwriters verify that all the documentation provided is accurate and that the loan conforms to lending guidelines.
AUS(automated underwriting system): To eliminate shady underwriting it is now mandated that all loans go through a AUS for final approval. Once all the information is verified and paperwork is in place the raw numbers, such as salary and credit score, are imputed in this computer system. Some complex formula later, the loan is approved or not. Typically your loan officer and processor catch any approval issues prior to this point.
Source: Mortgage Confidential: What you need to know that your lender won’t tell you
Read the complete Mortgage Confidential series here
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