What do mortgage loan processors do? In short, everything to close your loan!

I’ve already covered the role of a mortgage underwriter, so let’s take a look at what mortgage loan processors do too.

After you talk to your mortgage broker or loan officer and agree to move forward with your loan application, the processor may contact you to gather the required paperwork.

This person is responsible for preparing and organizing your loan file and taking it to the underwriting department for approval.

Other than that, they can also answer questions, provide status updates, and guide you through the loan process from start to finish.

In this sense, they play an essential role in financing your loan while acting as a liaison between you and all parties to the loan.

Loan processors are the backbone behind your mortgage

  • The main job of a loan processor is to assist mortgage brokers and loan officers from application to financing
  • They collect and review important papers from the borrower such as pay slips and bank statements
  • And look for any red flags along the way that could cause problems or headaches
  • They also communicate with all parties of the loan from start to finish to ensure everything runs smoothly

Loan processors, also known as loan coordinators, are very important figures in the home loan process, and are often very knowledgeable about mortgages as well.

They are the loan officer’s right-hand man who helps with loan preparation and all the day-to-day things that happen from loan origination to loan financing.

This includes collecting paperwork from the borrower, determining loan eligibility, reviewing loan files, submitting documents to the guarantor, answering questions, and communicating with all parties along the way.

They don’t just get the loan file from the salesperson and submit it; They review everything like debt-to-income ratios, bank statements, and employment history to ensure the file is actually approved.

Simply put, their role in the loan approval process is critical, as errors made by the loan originator can be detected and corrected before the file falls into the unforgiving hands of the guarantor.

Once it reaches the guarantor’s office, there is usually no turning back.

Assuming your loan is approved, the processor will also receive a list of pre-document conditions (PTDs) that must be met before the borrower can sign the loan documents and fund their loan.

It is the processor’s job to work with the loan originator, title and escrow companies, and various other companies to obtain all the necessary paperwork to fulfill these terms.

With so many people involved in the mortgage process, things can get very complicated in no time at all.

The good news is that they deal with many loan files every month and have likely seen them all. This means that in addition to pushing paper from point A to point B, they can solve problems and put out fires.

You may spend more time working with a therapist than with anyone else

  • It is more common to talk with a therapist than with a loan officer
  • Once you submit your loan application, they may be your main point of contact
  • Since the main focus of call desks/brokers is to spend more time selling and finding new prospects
  • The good news is that loan processors are often very knowledgeable and hard-working individuals

While the loan officer or broker may be the person who initially “gets you the loan,” the processor will likely take over once you are “sold” on the company you will be working with.

This sales portion is very important because loan processors are not supposed to offer or negotiate mortgage rates or discuss the terms of your loan.

Their role is to assist the loan originator, whose job is to sell you the price/product.

However, some processors are actually more knowledgeable than their sales colleagues because they handle higher volume and may have many years of mortgage experience under their belt.

And while it may seem strange, you may end up spending more time on the phone with a loan processor than with a loan officer.

After all, the call desk will want to come back to find additional clients, while the processor will focus on closing your loan.

But it’s essentially a team effort, with everyone working together to get to the finish line with as few obstacles as possible.

In short, the loan originator is quick to bring in new borrowers and the loan processor is quick to get loan financing, while both may anger the guarantor in the process. 🙂

Loan processor vs account manager

If the mortgage is obtained via the wholesale channel (from a mortgage broker), there are essentially two loan processors working together on one file.

Who works for the mortgage broker mentioned above. The person who works at the wholesale bank/lender, is usually referred to as an Account Manager (AM).

This account manager is assisted by the account executive (AE), who is essentially the sales representative on the wholesale side of things.

Like a loan processor, the AM will request and review documents from the broker and various third-party vendors to ensure the loan closes in a timely manner.

The AM also acts as a liaison, but between the AE and the underwriter. And what they communicate to the AE can be passed on to the broker.

Loan Processor FAQs

Do loan processors need a license?

Some independent processors may need licenses, but those who work for licensed mortgage lenders or under the supervision of licensed mortgage originators may be exempt. This can vary from company to company and from state to state.

Do loan processors make a commission?

They certainly can and often do. It depends on how their pay structure is set up with their employer. They may get paid per funded loan file or a base salary and a bonus for a certain volume of loans funded each month.

How much do loan processors make per loan?

Again, it depends on the company and perhaps the base salary. If they have low or no base, they will likely earn a lot more per loan via commission. The downside is that they then work in a performance-based job.

Do loan processors work weekends?

Position may require weekend work if the assigned lender or broker is busy, or has busy periods. However, many processors only work Monday through Friday like most other bankers.

Do loan processors work from home?

They can work remotely or from home depending on the lender or broker’s preferences. Or if they are independent, they can run their own home office and work with several brokers/banks.

What are the loan processing fees?

This is a very real fee for the hard work done by the loan processor. As I mentioned, loan processors may do more work once the saleswoman (or man) gets you in the door. These fees can range from $200 to $700 or more.

Some may refer to them as unwanted fees but only if they are charged in addition to an exorbitant set-up fee. Sometimes the latter includes the work of the therapist and is not a separate item.

(picture: Cozumel)

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