Underwriting Process Taking Forever?

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The underwriting step in the home buying process can often feel out of the loan officer’s control. And when there is a high volume of mortgage loans, this process can be slowed down. However, we have three top tips for MLOs to help speed up the underwriting process. 

Understanding the pipeline and process better can help MLOs be more efficient because there are certain ways you can prep the file for the underwriting process that can help speed it up. 

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3 Ways to Help the Process:

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1. Cover letter 

The first way MLOs can help speed up the underwriting process is by adding a cover letter to loans they submit to underwriters. 

While this may seem to be an extra step not worth the effort, a good cover letter will provide a clear summary of the loan, assets, income, and appraisal. This helps processors and underwriters get a clear picture quickly, including anything that is out of the ordinary, which ends up saving you time later. 

Keep it neat, organized, and succinct. Don’t state the obvious, but adding more to the story that isn’t neatly summed up by the numbers will help the process. Make it easy for yourself by creating a cover letter template. 

2. Guidelines

There are program guidelines for specific loan types and you should be up to date on them if you can. 

Know expiration dates for documents so you don’t have to go back to borrowers before closing to request them. Especially with COVID-19 guideline flexibilities, many investors had shortened expiration dates to be mindful of so stay current and on top of things to make the process faster and smoother. 

3. Accuracy

Make sure that all the information on the borrower’s file is accurate and up to date. any inaccurate information will slow down the underwriting process. Some things to look out for are if the borrower is divorced, their file must have complete and proper divorce and separation documents. 

If they have a history of bankruptcy or foreclosure, their file must also reflect accurate documentation; pay careful attention to the dates. If they are using real estate-owned income, there must be accompanying required documentation, proper tax returns, and income analysis. If the borrower is self-employed, there is additional loan documentation and things to look out for. Calculating qualifying income accurately could be tricky so check the 1003 and submit all documentation completely. 

Taking the time to analyze the borrower’s income accurately and completely will have a better handle on the process and make it faster and easier for processors and underwriters.  They save time by not having to figure out where the initial income came from so document any calculations in the file submission. Use MGIC to help with this. Also, getting full tax returns before pre-approval will help the underwriting process as well. 

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So, there you have it! These are the three ways that MLOs can help speed up the underwriting process! Being knowledgeable is key and now you know what small changes you can make to expedite the mortgage loan. By incorporating these changes, one can be even more efficient and organized, which does wonders for the underwriters and processors. 

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