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Step 1. Receipt of Application. Upon receipt of your application, we review your application with you for clarification and accuracy. Step 2. Multiple Listing Service (MLS). We need to determine your property's current value. Our first step is researching your local MLS for similar properties to see what list price is being asked on comparable properties. Step 3. Comparable Sales & Property Profile. Our second step for determining value is ordering Data Quick Comps and a Property Profile of County Records on your property. Then we'll discuss how we arrived at our opinion of value. Three of the five steps for determining value are now known by us: - County Recorders Record
- Recently Sold Properties
- Current Comparable MLS Listings
These are the two unknowns: - Inspection of Property
- Appraiser's Opinion.
On Purchase Transactions lenders use the Purchase Price or the Appraised Value, whichever is lower. We are prepared to challenge an under-valued appraisal. On Refinance Transactions, if the value isn't there for what we need, we may stop right here, without spending more time and incurring the expense of an appraisal. Or, you may re-think your position on what you wish to accomplish. You may also decide to take a chance that your appraisal will provide the value we're seeking. Step 4. Credit Report, Debt-to-Income (DTI) & Qualifying Income. Now we order your Credit Report to establish your middle FICO Score for qualification purposes and you minimum reported monthly payments for your current obligations. If you are Self-employed we request your last two years Federal Tax Filings to determine your "Allowable Deductions" that may be added back into your "Qualifying Income." The dollar amount on these deductions that are added back will reduce your DTI by increasing your Qualified. The lower we can make your DTI, the more products with lower rates & fees to choose from. (See drop-down menu / Self-Employed Borrowers.) Step 5. Good Faith Estimate (GFE). When Steps 1 through 4 are completed, we'll discuss what products we believe you will actually qualify for in your situation, with what lenders, their current turn around times, their rates and fees, and the best way to structure your loan to make that happen. When that decision is made, we are able to estimate your Settlement Costs with a certain amount of accuracy. Now we submit your file through an automated electronic loan underwriting program for a "desktop approval." All the above must occur within Three Business Days of receipt of your application, as required by law. We count on your prompt cooperation. (A GFE, without going through these steps, is provided with little thought and credence.) Upon your acceptance of our GFE, we proceed to Step Six. Also, when you receive our GFE we'll provide a list of the documents we'll need to submit your loan package to the lender. Note: On purchase transactions, we are not allowed to send a GFE until receipt of your Final Purchase Agreement, signed and dated, by all responsible parties involved in the transaction. Step 6. Preliminary Title Report & Open Escrow. On refinance transactions, we order your Preliminary Title Report and open Escrow. On purchase transactions, Escrow has been opened by the Seller and their Escrow has provided us with the documents and information we need to properly structured your loan package. Then, we electronically submit your loan file to our banking division. Step 7. Loan Package Submitted. When our banking division receives your loan package it is recorded and then sent to our "set-up department." They assign your file to the Portfolio Lender of choice for underwriting or to one of our Correspondent Underwriters. At that point they also send you your Loan Disclosures. When they receive notification that your received these documents, or Three Business Days since mailing, we are allowed to place an Appraisal Order through an Appraisal Management Company (AMC). The usual time-frame for receipt of a completed appraisal is about 5 Days. This HVCC AMC Regulation does not apply with most of our Portfolio Lenders. We are still allowed to use our preferred appraisers. Note: When your file is received in underwriting, on Correspondent Loans, you will begin to be notified of rate changes on your quoted GFE rate, as often as they occur. Correspondent Rate Updates are computer generated. They are sent directly to your email address. With most lenders you may lock your loan upon notification of your receipt of the Lender's Disclosures, or Three Business Days of sending Disclosures, whichever is sooner. You may lock in your rate anytime afterward or continue to "float." Your loan must be locked no later than 8 days prior to our Anticipated Closing Date. Step 8. In Underwriting. The underwriter will verify all documentation received in your file. Upon completing this task, we receive your Conditional Approval. We are provided a detailed list of required "Conditions" (additional information and/or documentation) for the Broker, Escrow and Lender to fulfill. We'll provide a copy, annotating which "Broker Conditions" you are to provide. Conditions that you provide are returned together with your 800# fax cover sheet. After the underwriter verifies our Conditions we'll either receive more Conditions or the underwriter will "sign-off" with All Underwriting Conditions Satisfied. When all Conditions are satisfied your file goes into their auditing department. Upon satisfactory completion of a Preliminary Audit, we receive a Clear-to-Close (Loan Approval). Step 9. Clear-to-Close. Upon receiving your Clear-to-Close we request your Initial Closing Documents to be sent to Escrow. Escrow may also have additional Closing Conditions they must fulfill at this time. Upon completion of Escrow Conditions and your Initial Closing Documents, Escrow returns them to the lender's funding department. The funder reviews Escrows documents. Then your file goes to Funding Review. Your file receives a Secondary Funding Audit. We may or may not have additional Funding Conditions. If we do, these Conditions must be reviewed and Satisfied prior to Final Docs being sent to Escrow for Closing (Signing). We coordinate the document flow with Escrow. Escrow completes your Final Closing Documents. Working together, our goal is for your Closing to go smoothly. Step 10. At Settlement. When Escrow has completed your Final Docs you are ready for Signing. You will provide payment of Settlement Fees at time of signing by Certified Check. Signing may be performed at Escrow or your residence. After signing has been performed, Escrow returns your Signed Closing Documents to the lender. The lender's Auditing Department performs their Final In-Depth Audit upon receipt. This may take several days. There's still a small possibility we may receive additional Conditions due to the final audit. Once the audit is cleared, Escrow is given a Wire with the funds for your loan. Escrow performs a Final Accounting of Funds and then records your transaction with your County Recorder's Office, prior to release of funds. Step 11. Happy Funding. On a purchase, 2nd home or investment property refinance, release of funds occur on the same or following business day of Recording. The time-frame depends upon your County Recorder's Office. One to two days is normal. On an owner-occupied refinance, funds are released after your three business day rescission period has elapsed. Loans usually fund within 30 to 45 days of application, except the below. Short Sale or In-Foreclosure Property Purchase. No one has control except the current lender. It may take several months before we know if they accepted or rejected your offer, before final underwriting may be performed. REO Purchase. Usually the Bank will accept or reject your purchase offer within 30 days, before final underwriting may be performed.
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