Once the loan has been underwritten, you will receive the underwriting decision via fax or email from the underwriter. It may also be available on the lender’s website if they use online technology. You will need to review the underwriting decision thoroughly to make sure the loan was underwritten with the appropriate loan amount, interest rate, loan program, term, etc. The most common decisions are as follows:

· Approval- the lender has approved the loan as submitted and requires no additional documentation to close the loan (these are few and far between but we love ‘em when we get ‘em!)

· Conditional Approval- the lender has approved the loan but needs some additional documentation (stips / conditions) to finalize the approval and finance the loan (this is by far the most common)

· Suspended- the underwriter did not have enough information to make a decision on the loan and requires additional documentation

· Denied with Counteroffer- the lender has denied the loan as submitted but has issued an approval under a different program or different terms

· Denied- the loan has been denied by the lender

If the loan has been approved and requires no further prior-to-doc (PTD) information, the file will be sent to the lender’s closing department. You may still need to provide some prior-to-funding (PTF) conditions, such as a doc request form, title information, insurance, etc.

If you receive a conditional approval (most likely) or a suspend notice, review the requirements listed by the underwriter. Don’t be overwhelmed if it seems like a lot. Review each item one at a time. If there is anything listed that is unclear or that you might not be able to get, call and speak with the underwriter. Ask her to go over the conditions on which you have questions. She can also help you if you don’t think you can obtain a certain stip. Find out what she’s looking for, specifically, and why. This will help you to know exactly what information you need to get.

If the requested documentation might be a problem, ask if there’s anything else that might satisfy the condition. Sometimes the underwriter will ask for “A” but the stip could also be satisfied by “B”. For example, the underwriter might ask for an award letter for your borrower’s social security income. If the borrower doesn’t have his current award letter, perhaps the underwriter will accept his last two years’ 1099s instead. Or maybe the income is direct-deposited on his bank statements.

Once you’re clear on everything you need, contact the necessary parties to obtain the information. Make sure to confirm the loan amount, program, rate, terms, etc.

If you receive a denial with counteroffer, review it thoroughly to determine if the proposed program will work for and benefit your borrower. Contact your AE or the underwriter if you have any questions on why your initial submission was denied or about the new program.

If you receive a straight denial, review it thoroughly including the submitted program and the reasons for the denial. Underwriters do make mistakes and you want to make sure that the correct loan program and file structure was considered. If the loan has been correctly denied, check with your broker regarding your company’s procedures for sending out the denial notification to the borrower. This needs to be done anytime a loan is denied by a lender, even if you intend to submit the file elsewhere. Also remember that there may be other options such as another lender with different programs, a seller-held second mortgage, gift funds, etc.

Shawn Arntson - Superior Processing