CTM Class 1 - 11-19/-13

Loan Basics
The System Of Review
Loan Document Basics

Transcript

1. Presents Underwriting & Processing methods for residential mortgages
2. There is a path…  Your car is the result of many parts working together, how bad with their product be if they just randomly assembled car’s?  Creating a system to review a file is the KEY to quality and production  Creating a system of daily work habits is KEY to customer service  Remember underwriting a loan is not about just “the door” or “the engine” it’s about the entire car running well!
3. Making sure we have the basics right  Residential vs. Commercial  Residential Examples SFR ASFR CONDO PUD Multi Unit’s  Commercial Examples 5 units or more Strip Malls Commercial Zoned SFR’s Farm Land
4. Making sure we have the basics right  “Drip Down” effect of loan guidelines and loan program requirements  FNMA or FHLMC – also referred to as “agency” or GSE’s Investor (Cole Taylor is both Investor (wholesale) and company (retail)) Company Channel Specific Loan Type ( IE DURP guidelines are different then standard)
5. Making sure we have the basics right  LTV’s matter, it translates to “risk” which translates to guidelines  Primary = Highest LTV Second Home = Standard LTV’s Investment = Lowest LTV’s  Understanding the level of risk will help identify the “depth” of rules
6. The 4 Cs of credit  Credit The borrowers credit score and history of paying back other obligations  Capacity The borrowers financial ability to pay back the mortgage. This includes focus on income, employment history, current debts.  Capital The borrowers money in checking, savings, investments, and other properties.  Collateral The value of the property the borrower is pledging as security against the loan
7. How the 4c’s adjust
8. 10 Point Loan Review System  1) Read the story and understand the program  2) Credit & Debt  3) Income  4) Assets  5) Property Documents  6) Appraisal  7) Misc Docs not covered in 1-7 for example letters of explanation  8) Fraud Tool Review  9) AUS Run  10) Update conditions and status
9. Daily Work Habits  Organize your day  Suggestions… Get your “to do list” working www.simpleology.com Underwrite a new file Check your messages and return calls Clear 2-3 condition files  Wash, rinse, repeat
10. Loan Document Review  Starting with the Residential Loan Application or 1003  Let’s review the most common 1003 errors instead of boring you with every field
11. Which box is checked? Number of Kids 2 Year History 2 Year History Correct Phone #
12. Don’t “Lump” Income Use the drop down’s Used by both AUS’s Important on 2nd homes & investments!
13. Much of this is NOT needed, for example “car’s” or other assets Know the difference between S,PS, and R
14. Purchase price does not match PA Max concessions not checked BK and Foreclosure not checked, this affects AUS Findings Child support not checked properly
15. This is the “key” date for RESPA documents Check your “e-signature” policy
16. Loan Document Review  Review of the GFE  Lets start with the number 1 problem seen in underwriting auditing in regards to the Good Faith Estimate  IT’s MISSING!  Regulations require that a GFE is issued to the borrower within three business days of taking the loan application.
17. Review the basics Q 3/4 are commonly wrong Is this an ARM? Escrow account?
18. Missing MI or MIP is a common error Check company policy on what fee’s should be here
19. Not much on this page for UW’s to check!!
20. Loan Document Review  Review of Truth in lending or TIL  Lets start with the number 1 problem seen in underwriting auditing in regards to the Truth In Lending  IT’s MISSING!! (common theme huh?)  A TIL is issued along with the GFE
21. Match date to 1003 /GFE Check for escrow’s Match program IE May not or Will Not on prepayment Common error is for missing MMI or PMI
22. Loan Document Review  Expiration Dates  Income documents within 120 days of closing  Asset documents within 120 days of closing  Appraisal within 120 days of closing  Title Documents 90 days of closing  POP QUIZ!!! 1) How many days prior to application can the borrowers paystub be dated? 2) How many days prior to application can the borrowers bank statement be dated?