I've heard a lot of discussion lately of what exactly I or my staff do as a mortgage broker. Luckily I have an outlet, this "blog", to shed some light on what goes on "behind closed doors" with regards to our clients files. Hopefully, to your surprise, you will find this very educational and enlightening as to what we do as mortgage professionals.
First, let's assume we already have worked with the buyers and real estate agent to get a "buyer friendly" contract that will be acceptable to the lender. Also, let's assume we have met with the client and have signed the preliminary "disclosures" and explained the entire transaction in detail regarding: rate, term, product, closing costs, first payment, out-of-pocket expense, etc. Let us also assume that we have collected the necessary documents from the client in order to submit the file to the "right" lender (i.e. one that is respected, timely, customer service oriented, and possesses the best possible product for our client). This could entail all or some of the following: pay stubs, W2's, bank statement, savings statements, 401k, divorce decree, bankruptcy papers, lease agreements, etc.
Once all of this preliminary leg work is done we completely comb through the file to make sure that the underwriters understand the product and transaction type. For instance, I recently heard a story of a purchase closing going astray because the lender had the name spelled wrong on the closing documents. This could have all been avoided had the broker proofed the application and the loan commitment from the lender to ensure the proper name spelling. After we have a "complete" file we make copies and overnight the file to the lender for underwriting. In the mean time we are ordering title work, a closing protection letter, wire instructions, appraisal, home owner's insurance, verification of employment, verification of deposit, getting a copy of the canceled earnest money check and many other items.
When we have the commitment from the lender hopefully there are very few "conditions". This is really where brokers must do their homework. We must make sure the conditions are reasonable, make sense and are realistic. What do I mean? Well, if the client is a W-2 employee and the underwriter is wanting last year's Form 1099, something that does not exist for a W-2 employee, it is an item we cannot provide. We must then call or e-mail the underwriter, processor and account executive to make sure the issue is resolved. Some of you may be asking; what are "conditions"? Well conditions are stipulations to the loan approval the broker must provide in order for the loan to close. Examples of some conditions are as follows: updated pay stub, last year's W-2, lien release letter, 2 months bank statements, letter of explanation etc.
Keep in mind this entire time we are watching rate trends and market trends to advise the client when the best possible time to lock their loan might be. We want to make sure the client gets the best possible rate and the only way to do that is to have a substantial knowledge of the market and what does and does not affect interest rates. The market, especially in today's environment, is changing drastically and we must be on top of our game!
After the loan is cleared and ready to close we must make sure the proper fees are charged, along with the correct rate, term, loan amount and vesting. The last thing you want is a bill for some unpaid appraisal or inspection invoice that you must then contact the clients and explain to them why they have more expenses. Our job as a broker is to make sure all the I's are dotted and the T's crossed. This makes for a happy client, realtor, seller, buyer and title agent.
Hopefully you have a new view of the mortgage broker and what he/she does "behind closed doors". There is much more to discuss but this portrays the "nuts and bolts" and perhaps another blog will bring time to dig a little further into more details.
Your Comments are Welcomed!
Brought to you by the "Industry Professionals" at Professional Mortgage Group, Inc. Columbia, Missouri.
First, let's assume we already have worked with the buyers and real estate agent to get a "buyer friendly" contract that will be acceptable to the lender. Also, let's assume we have met with the client and have signed the preliminary "disclosures" and explained the entire transaction in detail regarding: rate, term, product, closing costs, first payment, out-of-pocket expense, etc. Let us also assume that we have collected the necessary documents from the client in order to submit the file to the "right" lender (i.e. one that is respected, timely, customer service oriented, and possesses the best possible product for our client). This could entail all or some of the following: pay stubs, W2's, bank statement, savings statements, 401k, divorce decree, bankruptcy papers, lease agreements, etc.
Once all of this preliminary leg work is done we completely comb through the file to make sure that the underwriters understand the product and transaction type. For instance, I recently heard a story of a purchase closing going astray because the lender had the name spelled wrong on the closing documents. This could have all been avoided had the broker proofed the application and the loan commitment from the lender to ensure the proper name spelling. After we have a "complete" file we make copies and overnight the file to the lender for underwriting. In the mean time we are ordering title work, a closing protection letter, wire instructions, appraisal, home owner's insurance, verification of employment, verification of deposit, getting a copy of the canceled earnest money check and many other items.
When we have the commitment from the lender hopefully there are very few "conditions". This is really where brokers must do their homework. We must make sure the conditions are reasonable, make sense and are realistic. What do I mean? Well, if the client is a W-2 employee and the underwriter is wanting last year's Form 1099, something that does not exist for a W-2 employee, it is an item we cannot provide. We must then call or e-mail the underwriter, processor and account executive to make sure the issue is resolved. Some of you may be asking; what are "conditions"? Well conditions are stipulations to the loan approval the broker must provide in order for the loan to close. Examples of some conditions are as follows: updated pay stub, last year's W-2, lien release letter, 2 months bank statements, letter of explanation etc.
Keep in mind this entire time we are watching rate trends and market trends to advise the client when the best possible time to lock their loan might be. We want to make sure the client gets the best possible rate and the only way to do that is to have a substantial knowledge of the market and what does and does not affect interest rates. The market, especially in today's environment, is changing drastically and we must be on top of our game!
After the loan is cleared and ready to close we must make sure the proper fees are charged, along with the correct rate, term, loan amount and vesting. The last thing you want is a bill for some unpaid appraisal or inspection invoice that you must then contact the clients and explain to them why they have more expenses. Our job as a broker is to make sure all the I's are dotted and the T's crossed. This makes for a happy client, realtor, seller, buyer and title agent.
Hopefully you have a new view of the mortgage broker and what he/she does "behind closed doors". There is much more to discuss but this portrays the "nuts and bolts" and perhaps another blog will bring time to dig a little further into more details.
Your Comments are Welcomed!
Brought to you by the "Industry Professionals" at Professional Mortgage Group, Inc. Columbia, Missouri.
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