I’ve covered the mortgage underwriter’s role, so let’s take a look at what “loan processors” do.
The loan processor is responsible for prepping and organizing the file and getting it over to the bank or mortgage lender for approval.
Processors don’t just grab the loan file and submit it; they double-check everything like debt-to-income ratios and employment information to ensure the file will actually be approved.
For this reason, they play a critical role in the loan approval process, as mistakes made by the loan originator could be caught and corrected before the file lands in the unforgiving hands of an underwriter.
Assuming the loan is approved, the processor will receive a list of prior-to-document conditions (PTDs) that must be met before loan documents are released by the bank.
It is the processor’s job to work with the loan originator, title and escrow companies, and various others to get all the necessary paperwork to fulfill those conditions; and things can get very complicated.
If the loan is originated via the wholesale channel (mortgage broker), there are essentially two loan processors working together on the file.
One who works on behalf of the mortgage broker and one that works at the bank, typically referred to as an Account Manager (AM).
The loan processor who works with the broker will essentially send conditions to the AM that works at the bank so they can be signed off.
If the loan is originated via the retail channel, the AM will work with the loan officer at the bank to get the conditions cleared.
Loan processors may also act as liaisons between the broker/loan officer and the underwriter.
In a nutshell, the loan originator hustles to bring in new borrowers and the loan processor hustles to get the loans funded, while both may irritate the underwriter in the process. : )