Review the loan application form to ensure all required information is provided. Confirm that all necessary documents and signatures are included. The goal is to ensure accuracy and completeness in the loan application form, minimizing errors or missing information. If any issues or discrepancies are found, reach out to the loan applicant for clarification or additional documentation. Resources: Loan application form, document checklist.
1
Incomplete
2
Complete
1
Identification documents
2
Proof of income
3
Tax returns
4
Bank statements
5
Credit report
Verify loan applicant's employment status
Confirm the loan applicant's employment status to assess their ability to repay the loan. Verify the employer's contact information, job title, length of employment, and income details of the applicant. Reach out to the employer through phone or email to validate the provided information. If the applicant is self-employed, review their business documents and assess the stability of their income. Resources: Employment verification form, contact list.
1
Verified
2
Pending
3
Not verified
Check applicant's credit score
Assess the loan applicant's creditworthiness by reviewing their credit score. Request a credit report from a reliable credit bureau and analyze the borrower's payment history, outstanding debt, and any derogatory remarks. Consider the credit score as one of the factors in evaluating the loan application. Resources: Credit report request form, credit bureau websites.
1
Bankruptcy
2
Foreclosure
3
Late payments
4
Collections
5
Judgments
1
Excellent
2
Good
3
Fair
4
Poor
Validate income and tax returns
Review and validate the loan applicant's income and tax returns to determine their financial stability and ability to afford the loan. Verify the accuracy of income figures, check for consistent income patterns, and ensure that tax returns are filed appropriately. Assess any additional sources of income, such as bonuses or investment earnings. Resources: Income verification form, tax return documents.
1
Verified
2
Pending
3
Not verified
1
Employment
2
Investments
3
Rental properties
4
Business income
5
Other
Crosscheck applicant's bank statements
Analyze the loan applicant's bank statements to validate their financial stability and confirm the accuracy of declared income. Review the transaction history, detect any unusual activities, and reconcile the income and expenses presented in the loan application. Examine bank statements for the past six months to gain insight into the borrower's financial habits. Resources: Bank statement analysis guide, loan application form.
1
Verified
2
Pending
3
Not verified
1
Large cash deposits
2
Frequent overdrafts
3
Suspicious transactions
4
Unauthorized withdrawals
5
Irregular income patterns
1
Yes
2
No
Clarify sources of non-employment income
Obtain detailed information about any non-employment income sources declared by the loan applicant. Analyze the stability and reliability of these income streams to assess their contribution to the borrower's repayment capacity. Verify the documentation supporting the non-employment income, such as rental agreements or investment statements. Resources: Non-employment income verification form, supporting documents.
1
Verified
2
Pending
3
Not verified
1
Rental agreements
2
Investment statements
3
Bank statements
4
Business contracts
5
Other
Evaluate property appraisal report
Review the property appraisal report to assess the fair market value of the property in consideration for the loan. Evaluate the accuracy and credibility of the appraisal, ensuring that it aligns with industry standards and guidelines. Identify any potential red flags or discrepancies that may affect the loan approval decision. Resources: Property appraisal report, appraisal guidelines.
1
Acceptable
2
Needs clarification
3
Rejected
Check for any outstanding judgments or liens
Investigate if there are any outstanding judgments or liens against the loan applicant, which might affect their ability to repay the loan or the property's ownership rights. Search public records, court records, or credit reports. Verify the nature and status of any judgments or liens found and assess their potential impact. Resources: Public records search tools, credit report.
1
Tax liens
2
Federal judgments
3
Child support liens
4
State judgments
5
Other
1
Resolved
2
Pending resolution
3
Not resolved
Approve Applicant Interview notes
Review and approve the notes from the applicant interview. Ensure that all key discussion points, concerns, or special circumstances are documented accurately. Assess the applicant's explanations or clarifications regarding any discrepancies or issues discovered during the loan review process. Identify any pending or additional information required. Resources: Applicant interview notes, loan application form.
1
Approved
2
Needs revision
Approval: Underwriter
Will be submitted for approval:
Review and confirm loan application form
Will be submitted
Verify loan applicant's employment status
Will be submitted
Check applicant's credit score
Will be submitted
Validate income and tax returns
Will be submitted
Crosscheck applicant's bank statements
Will be submitted
Clarify sources of non-employment income
Will be submitted
Evaluate property appraisal report
Will be submitted
Check for any outstanding judgments or liens
Will be submitted
Review loan-to-value (LTV) ratio
Evaluate the Loan-to-Value (LTV) ratio, which compares the loan amount to the appraised value of the property. Determine the risk associated with the loan based on the LTV ratio. High LTV ratios indicate higher risk. Verify the accuracy of the loan amount and appraised property value to calculate the LTV ratio. Resources: Loan amount document, appraisal report.
1
Acceptable
2
Needs revision
Confirm homeowner's insurance policy
Verify that the loan applicant has obtained an adequate homeowner's insurance policy for the property. Request the insurance documents and review the coverage, deductible, and premium. Ensure that the insurance policy meets the lender's requirements and provides sufficient protection. Resources: Homeowner's insurance checklist, insurance policy documents.
1
Dwelling
2
Personal property
3
Liability
4
Loss of use
5
Other
1
Verified
2
Pending
3
Not verified
Evaluate applicant’s Debt-to-Income (DTI) Ratio
Assess the loan applicant's Debt-to-Income (DTI) ratio, which compares their monthly debt payments to their gross monthly income. Calculate the DTI ratio using the applicant's financial information. Determine the applicant's ability to manage additional debt based on their DTI ratio. Resources: Debt-to-Income calculator, loan application form.
1
Acceptable
2
Needs improvement
1
Mortgage
2
Auto loan
3
Credit card
4
Student loan
5
Other
Check compliance with Fannie Mae guidelines
Ensure that the loan application and supporting documents comply with Fannie Mae guidelines. Verify that all eligibility criteria and documentation requirements are met. Evaluate the adherence to underwriting, credit, and income guidelines. Identify any deviations or exceptions that require further analysis. Resources: Fannie Mae guidelines, loan application form.
1
Compliant
2
Needs review
1
Income verification
2
Credit report
3
Appraisal report
4
Employment verification
5
Other
Approval: Compliance Officer
Will be submitted for approval:
Approve Applicant Interview notes
Will be submitted
Review loan-to-value (LTV) ratio
Will be submitted
Confirm homeowner's insurance policy
Will be submitted
Evaluate applicant’s Debt-to-Income (DTI) Ratio
Will be submitted
Check compliance with Fannie Mae guidelines
Will be submitted
Evaluate loan for possible risks
Identify and assess potential risks associated with the loan application. Analyze factors such as credit history, income stability, property value, and borrower qualifications. Evaluate the significance of these risks and their impact on the loan's performance or the lender's financial exposure. Resources: Risk assessment guidelines, loan application form.
1
Low credit score
2
Unstable employment
3
High LTV ratio
4
Non-employment income
5
Credit history issues
1
Low
2
Moderate
3
High
Decide on mortgage terms and conditions
Determine the appropriate mortgage terms and conditions based on the loan applicant's financial profile and risk assessment. Set the loan amount, interest rate, loan duration, and repayment terms. Consider the applicant's creditworthiness, income stability, and property valuation. Assess the desired loan-to-value ratio, debt-to-income ratio, and credit score requirements. Resources: Mortgage terms and conditions guide, risk assessment report.
1
Fixed
2
Adjustable
Prepare pre-funding quality control report
Compile and document the findings and outcomes of the pre-funding quality control process. Summarize the assessment results, highlighting critical observations, exceptions, or discrepancies. Include recommendations or requirements for further actions. The report serves as a reference for quality assurance and auditing purposes. Resources: Pre-funding quality control report template, assessment findings.
1
Income verification
2
Credit assessment
3
Property valuation
4
Risk assessment
5
Document compliance
Approval: Loan Officer
Will be submitted for approval:
Evaluate loan for possible risks
Will be submitted
Decide on mortgage terms and conditions
Will be submitted
Prepare pre-funding quality control report
Will be submitted
Deliver final decision to applicant
Communicate the final decision regarding the loan application to the applicant. Provide a comprehensive summary of the assessment and the reasons behind the decision. If approved, include details of the approved terms and conditions. If declined, explain the reasons for the rejection and suggest alternative options or improvement measures. Resources: Loan decision template, loan application outcome.
