The mortgage approval process requires many steps and stakeholders in order to finalize the loan. The borrowers must collect and supply various documentation, and the internal lender teams then have to process the information, which includes multiple departmental approvals. After the borrower delivers the required documentation to their loan officer or contact, it is passed to the mortgage processors to begin the underwriting process.
The underwriting process has three high-level areas that must be completed in order to finalize the approval process. They are:
- Financial Review. First and foremost, the borrower’s financials – either their employment (for a personal loan) or the corporate financials (for a commercial loan) – need to be sound in order to obtain a loan. To verify this, the lender’s application package requests various documents be provided and then reviewed for financial soundness and mortgage compliance.
- If any concerns come up during this review, it can often lead to additional conditions being added in order to get approval or further review being requested from the lender’s legal team.
- Issuing an Appraisal. Following acceptance of the offer on a property and a signed contract, an appraisal is ordered by the lender to verify, via a third party, that the offer amount accepted is appropriate based on other comparable properties in the area.
- Obtaining a Survey & Title Insurance. Financial lenders have a fiscal responsibility to confirm that there are no issues with a property before a purchase is finalized and the loan is issued. A title search and survey must be ordered and completed ahead of time to verify that the property can be transferred legally and the title insurance can be issued without any impediments.
With each of these steps come multiple handoffs through various teams. If anything is missed or overlooked, it can stop the entire process and prevent the loan from being finalized. Having teams in place to oversee the entire process and make sure that the various subsets of the process are working together smoothly can prevent unnecessary oversights and holdups.
Using an underwriting support service to oversee and/or implement each of the processes can expedite the workflow and improve loan turn times, while preventing any costly oversights. A dedicated service provider will:
- Have an experienced and dedicated team that generates accurate and applicable loan disclosure documents and can verify that the correct information is being requested (for the borrower to complete the documentation) before hand-off into the next phase of the underwriting process.
- Use dedicated reviewers to verify that all documentation in the application package content is complete, the information provided is accurate, and any red flags are noted and resolved in a timely fashion.
- Manage the communication flow with one contact point that can order, track, and keep the appraisal, survey, and title process moving forward in a timely fashion in order to streamline the process.
- Have attorneys review documentation that is sent up the chain for compliance and regulatory questions, financial due diligence inquiries, fraud and risk assessment (based on the loan types), and loan value confirmation to provide reassurance that there is a low risk of loan default.
- Provide loan QA at various stages, including pre-funding and pre-closing, to prevent oversight by internal processors who have their own individual responsibilities during the underwriting process.
If your organization is looking for ways to improve efficiencies and create cost savings within your underwriting and loan processing, contact Baer Reed today for more information.
Mr. Reyes graduated with honors from the Ateneo de Manila University, where he received the Procter and Gamble Student Excellence Award. He obtained his Juris Doctor degree from the Ateneo de Manila School of Law. During law school, Mr. Reyes was part of the Philippine delegation to the Willem C. Vis International Commercial Arbitration Moot held in Vienna, Austria. He was also a member of the Ateneo Society of International Law and the St. Thomas More Debate Society. He completed his internship at the Public Attorney’s Office. He wrote a thesis entitled: “To Kill A White Elephant: An Analysis of the Fiduciary Exception to the Corporate Attorney-Client Privilege”. Mr. Reyes is admitted to practice law in the Philippines and the State of New York.
Ms. Lardizabal-Manzano is a graduate of San Sebastian College-Recoletos, where she earned her B.A. in Political Science. In 2003, she received her law degree from Lyceum of the Philippines and was admitted to practice law in 2004.
Matthew Hersh earned a B.A. in Political Science from Columbia University in 1990 and graduated cum laude from Georgetown University Law Center in 1999. He also holds a master’s degree in international relations from the Georgetown University School of Foreign Service.
Cap. Avi Levak (Res. IDF) graduated from from Israel’s prestigious Ben-Gurion University of the Negev with a Bachelor of Science in Computer Science and Mathematics. He is also a Leadership and Communication coach trained in TuT coaching by Alon gal in Israel. Avi specializes in high-level, in-depth analysis of business and client needs, within systems and software strategy and architecture.
Ms. Tyler graduated cum laude from Georgetown University and received her law degree, cum laude, from Georgetown University Law Center. During law school, she interned at the United Nations Economic Commission for Europe. She also worked on The Tax Lawyer journal and was a member of the award-winning Barristers’ Council Mock Trial Team. Ms. Tyler is admitted to practice law in the State of California and the District of Columbia.
Ms. Cruz-Anonuevo graduated cum laude and top nine in her batch from Miriam College with a degree of Bachelor of Arts in InternationalStudies. She obtained her Juris Doctor degree from Ateneo de Manila University School of Law in Rockwell. During law school, she interned in Rivera, Santos, Maranan & Associates. She was also part of Ateneo’s Labor Law Bar Operations. She wrote her thesis on, “Stealing Privacy: Limitations on Media’s Photographic Invasion.,” Ms. Cruz-Anonuevo is admitted to practice law in the Philippines.
Ms. Aquino-Batallones obtained a Bachelor of Arts degree in Development Studies (with Minors in Global Politics and Hispanic Studies) from the Ateneo de Manila University. In 2011, she received her Juris Doctor degree from Ateneo de Manila University School of Law. During law school, she interned at Romulo Mabanta Buenaventura Sayoc & de los Angeles then became an intern of Ateneo Legal Services Center’s Clinical Legal Education Program.
Mr. De Guzman graduated from San Beda College with a degree of Bachelor of Arts Major in Economics and received his law degree from San Beda College of Law. He is multilingual and is fluent in three languages: Chinese, Filipino, and English. He was admitted to the Philippine Bar in 2003.