In times of high mortgage volume, loan officers can help speed up the underwriting process by paying attention to a few simple steps when submitting a borrower’s loan information.
I was a mortgage underwriter for 20 years. From an underwriter’s perspective, I understand what it takes to get a mortgage loan approved in a timely fashion. This insight has helped me become a top producing loan officer for the past 6 years. I find that now, more than ever, with the high level of mortgages many loan officers are handling, we need to address the process and pipeline to better understand where we can become more efficient. Spending a little extra effort getting the file ready for the underwriting process will save you time chasing missing information or correcting mistakes later in the process.
Here are 3 simple ways loan officers can help speed up the underwriting process, close more loans faster and be more organized while doing it.
1. Cover letters to move homebuyers to homeowners faster
I find many loan officers ignore the opportunity of simply adding a cover letter to loans they submit for underwriting. This may seem like a basic step that is not paramount to the success of a loan being efficiently underwritten – I disagree!
A single-page cover letter that provides a clear summary of the loan related to the credit, assets, income and the appraisal helps processors and underwriters quickly identify anything out of the ordinary. Most importantly, if there is something unique about the loan, taking the time to explain it up front will save you time later. No need to restate the obvious, but add the parts of the story not told by the numbers. Do the work once: Create a cover letter template you can use again and again.
The last thing an underwriter wants to be is confused when they look at a loan file. Help mitigate that risk by including a cover letter with each loan submission. If you keep it neat and organized, I promise the underwriting team will thank you and appreciate your efforts.
2. Stay up to date on guidelines
Loan officers should always be current on program guidelines. Don’t rely on memory – read the AUS reports and pull up the program guidelines for specific loan types such as jumbo, construction/perm and others. Be mindful of document expiration dates when gathering information so you don’t have to make additional requests of your borrowers before closing. Many investors have shortened expiration dates during temporary COVID-19 guideline flexibilities, so stay up to date on current requirements and look at the documents when you receive them.
Dates on paystubs, bank statements, credit reports and even year-to-date financial statements are all subject to specific guidelines and obtaining usable documents makes the entire process smoother and quicker.
3. Accurate information
Accurate information on a borrower’s file is essential to speeding up the underwriting process. For example, if the borrower is divorced, you must submit their file with the proper divorce or separation documents. If the mortgage borrower is using real estate owned (REO) income you need to complete an income analysis, submit proper tax returns and all associated documents. And if a mortgage borrower has a history of foreclosure or bankruptcy you need to provide the accurate documents and review the dates prior to loan file submission.
Loan officers who work with self-employed borrowers (SEB) have extra challenges when providing loan documentation. Accurate information is always important in the loan process; however, with self-employed borrowers calculating qualifying income can be tricky. Be sure to check every section of the 1003 and turn in all documents that are required for the borrower’s situation.
Loan officers who take the time to accurately analyze borrower income will better set expectations with borrowers and save processors and underwriters time trying to figure out where the initial income came from. Always document your calculations within the file submission (even if you aren’t sure if it’s accurate). MGIC has an excellent worksheet to assist with this. As a top producing loan officer, I have also found that securing full tax returns before the preapproval helps in expediting the underwriting process for mortgage loans.
By incorporating these 3 steps, loan officers can speed up the underwriting process. Start with small changes and adapt as needed. The underwriting process of a mortgage loan is an important one. As a loan officer, finding ways to be more efficient will help the underwriting process go smoothly. Loan officers who are organized in getting their loans ready for the underwriting process will close more mortgage loans.
The opinions and insights expressed in this blog are solely those of its author, Lorri Hoffman, and do not necessarily represent the views of either Mortgage Guaranty Insurance Corporation or any of its parent, affiliates, or subsidiaries (collectively, “MGIC”). Neither MGIC nor any of its officers, directors, employees or agents makes any representations or warranties of any kind regarding the soundness, reliability, accuracy or completeness of any opinion, insight, recommendation, data, or other information contained in this blog, or its suitability for any intended purpose.