Birth, Labor & Delivery of a mortgage loan:
1. Borrower (B) either calls local mtg lender, responds to radio/tv ad (may be non-local) or applies on-line (local or non-local).
2. (B) info is held against a matrix of data (credit score, amount of loan-to-value of prop, empl. stability, property value, income, amount of current debt, etc) and a product is chosen from those (B) qualifies for. (One reason product at the table may not be what (B) originally wanted - may not have qualified and this wasn't communicated.)
3. Title commitment is pulled - lenders have relationships with title agencies, usually use whomever their relationship is with, this will usually be the Settlement Agent (which is the entity that receives and disburses the loan funds.) This is also usually where the signing appt originates - whether directly, or through SS.
** Smaller agencies don't outsource many of their signings because their (B)'s tend to be local, as their lender relationships tend to be local. To outsource might cut into a profit margin that can't take the cut. On the flip side are larger companies w/ own title AND signing agencies (First American Title /FASS, for example)
** Lenders not local to (B) use title co they have relationship with, and odds are T/C isn't local to (B), either. SS and NSA industries 'bread & butter'. These are usually internet, radio or tv ad generated.
** Local lender who can not qualify (B) on one of their own products (or who has no product of their own and brokers all loans) will "broker" the loan to a sub-prime lender, who is generally not very local. Loan closing will remain with T/C of originating lender's choice - so may STILL be local to (B).
4. Lender has loan underwriten and approved to close, sends to closing dept for docs to be drafted. U/W may not be able to approve as submitted, makes counter-offer (different product, different rate, etc.) Loan Officer (L/O) doesn't always communicate to (B) these changes - (B) learns at the table.
** These changes (from fixed to arm, from this rate to that rate, etc) DO NOT USUALLY INDICATE ANYTHING BUT A LACK OF COMMUNICATION. I note this because of how often I see postings accusing others of being "fraudulent" or "unscrupulous"/
5. Pkg is sent to Settlement Agent to be closed/executed. Final HUD is compiled and usually produced by Settlement Agent (some Lenders do their own though).
6. Means of closing is determined at this point - farmed to SS or NSA, (B) brought into office, etc.
7. Loan docs executed and returned to Settlement Agent, who disburses loan funds (at correct point) and sends recordable docs to county for recording. Makes cert. copies of those, returns pkg to lender.
8.) Lender performs audit of docs, authorizes release of funds. From this point - loan may be prepped for immed. sale, may be scanned and held for sale, may be 'in-house' loan and serviced by same.
That's the basic life of a loan.
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