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Save Weeks Of Time On Mortgage Underwriting Process
Typical Process of Mortgage Approval Of course, it now takes more time and effort to gather all the documentation required for mortgage approval by the funding bank. Sharp buyers and their loan officers can have their paperwork together in about a week. Then, the officer submits the application and paperwork to the funding bank. Once there, it typically goes into a long line of mortgages also waiting approval – behind three-hundred or more applications is not unusual. Fine-Tooth-Comb Process After about a week, the application lands in the hands of the underwriter. This person endeavors to ensure your application is flawless and to ensure there are no irregularities that would put the funding bank at any risk. After going over the documentation with a fine tooth comb, the package is usually returned to your mortgage broker with some final conditions for approval. Craziness Can Prevail Re-checking employment and re-confirming bank accounts is understandable. Things can get silly. One underwriter would not approve a contract because the home the buyer wanted to buy was governed by a home owners association. Responsible for general maintenance of common areas and caring for the front lawns, it had an insurance policy in place for $1,000,000. The underwriter wanted the insurance amount increased to $2,000,000 just in case someone sued for greater than a million for a slip and fall accident. The homeowners association had a good laugh and the buyer did not get the property. Get Back In Line After conditions are met, once again you are back in line behind 300 applications. Another week transpires before the loan is back in the hands of the underwriter. After that, the prospective owner has been waiting up to five weeks. Of course, the underwriter wants the property appraised again because of the volatility in the housing market. Another week transpires. The Secret of the Correspondent Bank What is a correspondent bank? The Financial Dictionary says: A bank that has limited access to financial markets and must use the services of another bank to conduct certain transactions. These banks are usually small. They have agreements with other banks to provide services for account holders without incurring the expense of those services themselves. So, they have the money to fund the mortgage, but do not have the federal qualifications to hold the mortgage for any length of time. Thus, they become a virtual branch of the larger bank and can underwrite and approve funds on behalf of the larger bank. Zip Zip Zip Essentially, the correspondent bank does in-house underwriting. The mortgage gets approved by the folks who actually have the money. It requires no further processing. Your mortgage broker hands the paper to the larger bank and it arrives as already approved and conditions met. So, you have just had two to three weeks shaved off your approval process. Understand, demand for mortgages fluctuates. Some folks apply when interest rates drop. Some rely on the season; people want to get things settled before the kids have to go back to school, for instance. All sorts of things can cause delays, but using a correspondent bank still saves time. Article Directory: http://www.articledashboard.com Mary Wise is a certified loan consultant who helps people get approved for Loans for People with Bad Credit and Guaranteed Christmas Loans. To get help with your financial situation you can visit her at www.badcreditloanservices.com |
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