This is a single-family/residential course.
The loan production process begins when a prospective borrower completes a loan application. Once the application is complete, it is passed to the loan processor, whose job it is to verify the information on the application and gather the necessary documents to complete the loan file package. A successful processor sets up the file accurately and completely so that when it gets to the underwriter, everything is properly documented, there are no missing items, and the underwriter has enough information to render a decision.
The processor plays a vital role in the loan production process. The processor asks and answers questions and puts the pieces of a puzzle together in preparing a loan file for submission to the underwriting team. In essence, the processor is the "traffic light" that keeps the flow of information moving down the highway to loan approval. The loan file tells the story of the loan, and underwriting bases the important decision of whether or not to approve a loan on the information contained in it. In turn, secondary market investors buy the loan with the assumption and expectation that the loan file information is accurate and the underwriter's approval decision was valid. The consequences of faulty information could include fraud, loan default, an investor requiring the lender to buy back the loan, and regulatory compliance issues. In short, a great deal depends on the completeness, accuracy, and validity of loan file documentation, and the processor's role is critical.
Processing Fundamentals considers fundamental concepts related to the processing function. It begins with a look at the work environment and typical processing department structure and then moves into specific tasks of the loan processor. These tasks include communicating with the applicant, complying with regulations, reviewing the loan application, documenting the file, scheduling tasks, reviewing loan documents, reviewing the appraisal, preventing fraud, and submitting the loan file to underwriting.
It is crucial for the processor to be aware of key Federal laws and regulatory disclosures affecting the mortgage loan process and the next section of the course will cover exactly that. This includes the Fair Housing Act, Equal Credit Opportunity Act, Truth in Lending Act, Real Estate Settlement Procedures Act, Home Mortgage Disclosure Act, Fair Credit Reporting Act, Fair and Accurate Credit Transactions Act, Gramm-Leach-Bliley Act, Uniform Electronic Transactions Act, Electronic Signatures in Global and National Commerce Act, and the Secure and Fair Enforcement for Mortgage Licensing Act among others.
Next, the course will examine the automation of the loan production process and how it affects the loan processor’s role. It will look at automated loan origination systems (LOS), automated underwriting systems (AUS), typical workflow for loans going through an AUS, as well as how to read and act on AUS recommendations. This section ends with a virtual field trip to further explore the agency’s automated systems.
Finally, the course studies the essential calculations that the processor must understand when preparing a loan file for underwriting. This is comprised of information about and how to calculate: the housing-to-income ratio, monthly housing expense, debt-to-income ratio, total monthly debt, and the loan-to-value ratio.
Working as a Processor
Automation in Loan Production
Seat time approximately one (1) hour.