Underwriting

  • Underwriter approves the loan with conditions, suspends the loan or denies the loan.
  • Updated pay stubs are obtained from the homebuyer along with updated financial statements to make sure they are all dated within 30 days of closing.
  • A new credit report is typically run if the original is over 30 days old.
  • Any gift funds for down payment are to be verified by the donor from the account of origin.
  • A 4506 (IRS form) is ordered to verify if the tax returns supplied have actually been sent to the IRS.
  • A background check is done to verify the actual owner of the landlord property listed on the VOR. (Verification of Rent)
  • A fraud check is performed to verify if paystubs/W-2s are real.
  • The earnest money check is verified to have cleared the bank account of the homebuyer.
  • Any updates to the title, appraisal, survey, bank statements, etc. required by the underwriter are translated to the appropriate parties.
  • Proper names, addresses and mortgagee clauses are added to the title.
  • Insurance is verified to be appropriate to the lender and program.
  • A flood certificate is ordered to characterize the flood zone status.
  • An appraisal review is performed to validate the appraisal is within acceptable limits.
  • A certificate of occupancy is obtained for any new home construction.
  • A final appraisal is ordered for any subject-to conditions.
  • The processor obtains the title fees, lender fees, HOA dues, and all other fees they can think of from the appropriate parties.
  • The processor figures the appropriate prorating of taxes that will come from the seller.
  • The processor determines if the taxes are on improved or unimproved property.
  • Seasoned funds (available reserves as reported on application) are again checked to be sure there are sufficient funds to close.
  • The rate lock is extended if necessary due to delays in the time to build the home. Delays may require you to pay an additional fee to the lender to extend the lock.
  • After all conditions under the sun are cleared, the loan is cleared to close.