Submitting the loan package to the lender is all about presentation, thoroughness and accuracy. The neater, more complete your file, the easier the underwriter’s job becomes, improving your chances for a clean approval. If all the information is in the file and easily accessible, there will be fewer holes in the loan and the underwriter will have fewer questions (the underwriter’s questions become conditions or “stips” on the approval).

Once you have received all of the necessary items to complete the loan file (appraisal, title, insurance, etc), you are ready to prepare the loan for submission to the lender. Check with your AE for specific information on how to submit. Many lenders will accept submissions via fax or email but some still prefer receiving the submission via overnight delivery (FedEx, DHL, etc). Your lender may require that you include a copy package with your submission file, as well. Some lenders may also require that you electronically upload your loan into their system. You’ll need to make sure you follow the appropriate submission procedures. If you don’t, your loan may not get entered into the lender’s pipeline and underwriting will be delayed.

Most lenders will have a form or two that they want completed for submission and some will require a specific stacking order as well. The AE (or the lender’s website) can provide you with the necessary forms. The submission forms will usually require information such as the borrower’s name and property address, the loan officer’s name and company, the processor’s name, phone and fax numbers, program information and rate and lock information. Make sure you complete the forms as fully and as accurately as possible as the underwriter will use the information on this form to structure and underwrite your loan. You’ll also want to include any prequal, pre-approval and/or rate quote that you’ve gotten from the AE or automated underwriting system.

You should also always include a cover letter to the underwriter when submitting a new loan. It’s a good way to introduce the loan and make sure the underwriter has the correct contact information should he/she have any questions and also for where he/she should fax or email the underwriting decision. This is also the place to include any specific details about the file. Perhaps your borrower just graduated from college and has moved from his part-time job into a new full-time career or maybe your borrower cosigned for a car for his daughter but she’s been making the payments for the last 18 months. The cover letter is the ideal place to explain these things and where you can indicate what supporting documentation you’ve included in the file (the college transcript or the daughter’s cancelled checks, for example). It goes back to providing the underwriter with a complete picture of the loan and not leaving any holes or questions as to what you’re trying to do and why. The cover letter is also the place to request any exception you may need and point out the compensating factors to support approving the exception.

If the lender has a required stacking order, be sure to comply. Failure to do this will make various forms and documents hard for the underwriter to find and they may get overlooked if not in the right place. If the lender does not have a specific stacking order, then you should use the basic stacking order of 1008, final and initial 1003s, credit docs, income docs, asset docs, property docs and initial disclosures. A detailed stacking order is listed below:

BASIC LOAN STACKING ORDER

Cover letter to underwriter
Lender’s Submission Form(s)
Prequal, Pre-approval, Rate quote
Transmittal Summary (1008)
Final, complete 1003 (loan application) signed by loan officer (borrowers will sign this at closing)
Original, signed 1003 (signed and dated by all borrowers and the loan officer)
Credit Report and documentation
-Letters of explanation (if required)
-Bankruptcy papers (if required; including Discharge of Debtor and all
schedules of creditors)
-Supporting documentation for any credit item should be included here
Divorce Decree, Child Support and Alimony papers (if applicable)
Borrower’s income documentation:
-Verification(s) of Employment (written or verbal; current employer first,
then verifications of past employment)
-1 mo paystubs
-2 years’ W2s
-Pension letters, SSI awards letters, etc.
-Tax Returns (if applicable)
Co-Borrower’s income docs (in the same order as the borrower’s)
Most recent 2 months’ bank statements (grouped by bank/account with checking and savings first, then 401k, IRAs, etc.)
Property documentation:
-Purchase contract (if applicable)
-Preliminary title commitment
-CPL (Closing Protection Letter), wiring instructions and preliminary HUD or
invoice showing title’s fees
-Payoffs (if applicable)
-Evidence of hazard insurance
-Evidence of flood insurance (if applicable)
-Appraisal, including copy of appraiser’s current license and appraisal invoice
Initial, signed disclosures:
-GFE (Good Faith Estimate)
-TIL (Truth-in-Lending)
-Signature Authorizations
-All remaining disclosures

When faxing in your submission, be sure to use a neat fax cover sheet that includes your company letterhead, your name and contact information. When emailing your submission, double check the email address and write a short note in the body of the email with regards to the attachment being a new submission. Use something like “New Submission- Smith, John” as your subject line. Again, include your name and contact information.

If you must overnight the loan, package the file neatly in a legal-sized file folder using a prong fastener to keep the documents in place. Be sure to make a complete copy package to keep in the working file before submitting the loan package to the lender. Always keep copies of absolutely everything that you send to the lender.

After you’ve submitted your file, wait. The underwriter will not be your friend if you pester. If the AE has told you that underwriting times are three days, do not call the underwriter on day two asking for status. If you don’t know the underwriting turn-time, allow at least 48 hours before following up on your file. Remember that while it may not always seem like it, the underwriters have the same goal you do: to close the loan if at all possible. They will review the file very closely in an effort to protect the lender but they do still want to be able to approve the loan. Make it as easy for them as possible and your loans will get through faster and with fewer headaches.

Shawn Arntson - Superior Processing