The housing market is currently witnessing a major surge, thanks to record-low mortgage rates. According to the Mortgage Bankers Association’s seasonally adjusted index, mortgage applications to purchase a home was a remarkable 21% higher than one year ago.
At a time like this, it is likely that underwriters may feel overwhelmed with the sudden surge in volumes. An underwriter does require several documents that are current and complete to ensure that there are no gaps in the borrower’s financial narrative. While some of these documents may have been collected at the beginning, to get the process started, the underwriter may also request additional documents, subsequently from the borrower.
Underwriting standards becoming more stringent
In recent times, mortgage underwriting standards have become more stringent. It is common for underwriters to review all documentation in detail and reach out for more information when something is incomplete. If underwriters feel there are conditions to clear, such as an explanation of late payments or employment gaps, they may ask to clear those conditions before proceeding further.
Underwriting conditions can vary according to the type of loan, employment nature, income, and overall credit profile. Some loan conditions are standard, while some may be more specific to a loan type. A few examples of standard loan conditions include proof of mortgage insurance, a title commitment, a clear title report, appraisal that must exceed a certain value, etc. Other conditions could range from anything, including documentation of proper homeowners’ insurance to letters of explanation for certain items in the loan file. Some conditions can also trigger a request for additional documents. However, it is essential that all these conditions are cleared when the file is submitted to the underwriter.
Avoiding increased costs in mortgage underwriting
When an underwriter spends time on incomplete files, it leads to increased costs, delays in meeting closing dates, and annoyed clients. Also, since the fees paid to mortgage underwriters are significant, it is even more crucial that the services are utilized in the best possible manner.
The role of mortgage processing companies to expedite condition clearing
The process of clearing conditions is often fraught with delays. The most common ones are errors on the loan applicants’ credit report or the need to get a few additional credit supplements or verifications completed.
In such scenarios, it helps engage with mortgage processing companies that have a dedicated team of professionals who work towards expediting the condition clearing process. These companies work with junior underwriters, engage with third-party vendors, and proactively help in clearing conditions so that the underwriting process can be faster and more efficient.
How PrivoCorp can help
Support in clearing conditions is offered by select mortgage processing service providers. Companies like PrivoCorp have the right combination of mortgage experts whose scrupulous review and validation of the loan files help improve and speed up the clearing conditions process.
If you are looking for an experienced mortgage processing services company to speed up the clearing conditions process and drive improved efficiency, PrivoCorp is the right partner. Get in touch with us to make a difference in your mortgage operations. Talk to us today! Reach out to us on marketing@privocorp.com
