Re: Help me understand the mortgage process please!
12-06-2012 03:29 PM
We submitted all our paperwork about 1.5 weeks ago. We just got an email saying that they just started searching the title. What stage of the process are we in? I thought that was done as soon as our documents were submitted. Can the appraisal be done before the title search is done? We're due to close early January...will things be done in time?
My second question is regarding the automatic underwriting process. When my LO gave us the pre-approval, he said he had to first run our numbers through his software. Is that the same software that the underwriters would use or do they have another program?
What exactly does it mean when people say the LO is "packaging the loan". Is there more than one way to package it. I guess I just assumed they just collected the documents and handed them over to the underwriters.
Not sure about where your company does the title search as I don't recall my loan officer even mentioning it. For me, at 1.5 weeks, I already had the appraisal and inspections completed, but I had to pay for them so I knew when they happened, and at that time we were submitted to underwriting.
Automated underwriting is an app that lets the lender know if there will be any issues prior to sending the package to the real underwriters. It's basic, but gives the LO a heads up as to any potential problems that might come up so the actual underwriting process will go smoother, or let you know if the app needs to be curtailed due to credit issues or otherwise.
The real underwriters have their own requires as specified by their company procedures. No specific app, that that they don't have one, but it's more up to whether or not investors will sign off on the loan and allow it to fund. The requirements are more stringent than they are for the auto-underwriting app, and they will give you a list of conditions to complete, such as submitting letters of eplanation for inquiries, or new credit, lates/chargeoffs, nsf fees, etc...and will also verify the source of all funds used for the loan to make sure you're not financing any of it (such as down payment, points, fees etc...). And if you get gift money, they will source the gift money as well from whoever gave it to you.
After that's done, it will be sent to a closing and then a funding team, who each might give additional conditions to satisfy before they approve it. At that point, the closing is scheduled, documents are signed, funds are transferred to escrow, escrow passes out checks, the purchase is recorded with the county it's being purchased in, and keys are handed off.