1. WHEN do you send a loan to the Underwriter?
Most lenders try to ‘protect’ their costly underwriter’s time by requiring the whole package to be prepared and appraisals completed before the underwriter reviews a file. This potentially can waste everyone ELSE’S time! When the underwriter reviews a file upon initial application, the processor & loan officer KNOW what the underwriter will require instead of trying to ‘out guess them’, and everyone saves a lot of time and wasted effort. Then you don’t have to ask the borrower for any unneeded documentation, or ask them for stuff late in the game after it has already been packed away! You also could save them money. Why order an appraisal on an unapprovable situation? Loan Officers don’t know ALL of the guidelines. Have you ever seen a loan fall through after receiving a prequalification letter?
2. What ‘credit overlays’ do you have on top of the Automated Underwriting System (DU, LP, GUS, etc) findings?
This can quickly reverse your preapproval into a turndown! Ex: credit scores, months of reserves, debt-to-income ratios, # of tradelines, length of employment history, PMI requirements, etc. This is why #1 is SO important!
3. Can you fix credit scores quickly?
Ask them if they use the rapid re-score process. Forcing a manual change in a customer’s credit score can take 5-7 business days from the date the credit agency submits the changed information to the bureaus. There is no limit to the number of trade lines that can be processed, but please keep in mind that this is a costly service. It costs $30.00 per trade line per person PER BUREAU. So fixing one joint account can cost $180! Even rejected documents are charged a fee of $10 per trade line.
This process hopes to increase a FICO score by removing incorrectly reported information from the credit report, but this result cannot be guaranteed. In fact, there is a possibility that the score will go down, because the three main credit bureaus recalculate the entire credit file, not just what has been changed on that trade line. So, if a new collection shows up in the time since the last report was pulled, that new bad information may counteract any good effects of the changed information.
When done, this creates a permanent change to a consumer’s credit record. Anyone pulling their credit after a rescore has been completed will also see the updated account information.
Written by:
Jim Garrison
Branch Manager
Mortgage Consultant
Brayden Capital Home Loans
Phone: 704-488-5020
e-fax: 866-935-5065
jgarrison@houseloan.com
