What Do Mortgage Loan Processors Do? In Short, Everything to Close Your Loan!

I’ve
already
covered
the

mortgage
underwriter’s
role,
so
let’s
take
a
look
at
what
mortgage
loan
processors
do
too.

After
you
speak
to
a

mortgage
broker
or

loan
officer
and
agree
to
move
forward
with
a
loan
application,
a
processor
may
reach
out
to
gather
required
paperwork.

This
individual
is
responsible
for
prepping
and
organizing
your
loan
file
and
getting
it
over
to
the
underwriting
department
for
approval.

Other
than
that,
they
can
also
answer
questions,
provide
status
updates,
and
guide
you
through
the
loan
process
from
start
to
finish.

In
that
sense,
they
play
an
integral
role
in
getting
your
loan
funded
while
acting
as
a
liaison
between
you
and
all
parties
to
the
loan.

Loan
Processors
Are
the
Workhorse
Behind
Your
Mortgage

• A
  loan
  processor’s
  main
  function
  is
  to
  assist
  mortgage
  brokers
  and
  loan
  officers
  from
  application
  to
  funding
• They
  compile
  and
  review
  important
  paperwork
  from
  the
  borrower
  like
  pay
  stubs
  and
  bank
  statements
• And
  look
  out
  for
  any
  red
  flags
  along
  the
  way
  that
  could
  create
  issues
  or
  headaches
• They
  also
  communicate
  with
  all
  parties
  to
  the
  loan
  from
  start
  to
  finish
  to
  ensure
  everything
  goes
  smoothly

Loan
processors,
also
known
as
loan
coordinators,
are
very
important
figures
in
the
home
loan
process,
and
often
quite
knowledgeable
about
mortgages
as
well.

They
are
the
loan
officer’s
right-hand
man/woman
that
assists
with
loan
prep
and
all
the
day-to-day
stuff
that
happens
from
loan
origination
to
loan
funding.

This
includes
gathering
paperwork
from
the
borrower,
determining
loan
eligibility,
reviewing
loan
files,
submitting
documents
to
the
underwriter,
answering
questions,
and
communicating
with
all
parties
along
the
way.

They
don’t
just
grab
the
loan
file
from
the
salesperson
and
submit
it;
they
go
over
everything
like

debt-to-income
ratios,
bank
statements,
and
employment
history
to
ensure
the
file
will
actually

be
approved.

Simply
put,
their
role
in
the
loan
approval
process
is
a
critical
one,
as
mistakes
made
by
the

loan
originator
could
be
caught
and
corrected
before
the
file
lands
in
the
unforgiving
hands
of
an
underwriter.

And
once
it
gets
to
the
underwriter’s
desk,
there’s
typically
no
going
back.

Assuming
the
loan
is
approved,
the
processor
will
also
receive
a
list
of
prior-to-document
conditions
(PTDs)
that
must
be
met
before
the
borrower
can
sign
loan
documents
and
fund
their
loan.

It
is
the
processor’s
job
to
work
with
the
loan
originator,
title
and

escrow
companies,
and
various
others
to
get
all
the

necessary
paperwork
to
fulfill
those
conditions.

And
with

so
many
people
involved
in
the
mortgage
process,
things
can
get
very
complicated
in
no
time
at
all.

The
good
news
is
they
handle
numerous
loan
files
each
month
and
have
likely
seen
it
all.
This
means
aside
from
pushing
paper
from
point
A
to
point
B,
they
can
solve
problems
and
put
out
fires.

You
May
Spend
More
Time
Working
with
the
Processor
Than
Anyone
Else

• It’s
  common
  to
  talk
  more
  with
  the
  processor
  than
  with
  the
  loan
  officer
• Once
  you
  submit
  your
  loan
  application
  they
  may
  be
  your
  main
  point
  of
  contact
• Since
  LOs/brokers
  main
  focus
  is
  to
  spend
  more
  time
  selling
  and
  finding
  new
  prospects
• The
  good
  news
  is
  loan
  processors
  are
  often
  very
  knowledgeable
  and
  hardworking
  individuals

While
the
loan
officer
or
broker
may
be
the
person
who
“got
you
the
loan”
to
begin
with,
it’s
the
processor
that
will
likely
take
over
once
you’ve
been
“sold”
on
which
company
to
work
with.

That
sold
part
is
pretty
important
because
loan
processors
aren’t
supposed
to
offer
or
negotiate

mortgage
rates
or
discuss
the
terms
of
your
loan.

Their
role
is
to
assist
the
loan
originator,
whose
job
it
is
to
sell
you
on
the
rate/product.

However,
some
processors
are
actually
more
knowledgeable
than
their
sales
colleagues
because
they
handle
more
volume
and
may
have
many
years
of
mortgage
experience
under
their
belt.

And
while
it
might
sound
odd,
you
could
wind
up
spending
more
time
on
the
phone
with
the
loan
processor
than
the
loan
officer.

After
all,
the
LO
will
want
to
get
back
to
finding
additional
clients,
while
the
processor
will
be
focused
on
getting
your
loan
closed.

But
it’s
essentially
a
team
effort,
with
everyone
working
together
to
get
you
to
the
finish
line
with
as
few
hiccups
as
possible.

In
a
nutshell,
the
loan
originator
hustles
to
bring
in
new
borrowers
and
the
loan
processor
hustles
to
get
the
loans
funded,
while
both
may
irritate
the
underwriter
in
the
process.
:
)

Loan
Processor
vs.
Account
Manager

If
the
mortgage
is
obtained
via
the
wholesale
channel
(from
a
mortgage
broker),
there
are
essentially
two
loan
processors
working
together
on
a
single
file.

One
who
works
on
behalf
of
the
mortgage
broker,
discussed
above.
And
one
who
works
at
the
wholesale
bank/lender,
typically
referred
to
as
an
Account
Manager
(AM).

This
AM
assists
an
Account
Executive
(AE),
who
is
essentially
the
salesperson
on
the
wholesale
side
of
things.

Like
a
loan
processor,
the
AM
will
request
and
review
documents
from
the
broker
and
various
third
party
vendors
to
ensure
the
loan
closes
in
a
timely
fashion.

The
AM
also
acts
as
a
liaison,
but
between
the
AE
and
underwriter.
And
what
they
communicate
with
the
AE
can
be
passed
along
to
the
broker.

Loan
Processor
FAQ

Do
loan
processors
need
to
be
licensed?

Some
independent
processors
might
need
licenses,
but
those
working
for
licensed
mortgage
lenders
or
under
the
direction
of
licensed
mortgage
originators
may
be
exempt.
This
can
vary
from
company
to
company
and
by
state.

Do
loan
processors
make
commission?

They
certainly
can
and
often
do.
It
depends
how
they
set
up
their
pay
structure
with
their
employer.
They
may
get
paid
per
loan
file
funded
or
a
base
salary
AND
a
bonus
for
a
certain
volume
of
funded
loans
each
month.

How
much
do
loan
processors
make
per
loan?

Again,
it
depends
on
the
company
and
perhaps
on
what
their
base
salary
is.
If
their
base
is
low
or
nil,
they’ll
probably
make
a
lot
more
per
loan
via
commission.
The
downside
is
they
are
then
working
a
performance-based
job.

Do
loan
processors
work
weekends?

The
job
might
require
work
on
the
weekend
if
a
particular
lender
or
broker
is
busy,
or
has
busy
periods.
However,
many
processors
just
work
Monday
through
Friday
like
most
other
bankers.

Do
loan
processors
work
from
home?

They
can
work
remotely
or
from
home
depending
on
the
preferences
of
their
lender
or
broker.
Or
if
they’re
independent
they
can
run
their
own
home
office
and
work
with
multiple
brokers/banks.

What
are
loan
processing
fees?

These
are
very
real
fees
for
the
loan
processor’s
hard
work.
As
I
mentioned,
loan
processors
might
do
more
of
the
work
once
the
saleswoman
(or
man)
gets
you
in
the
door.
This
fee
could
be
anywhere
from
$200
to
$700
or
more.

Some
may
refer
to
it
as
a
junk
fee
but
only
if
it’s
charged
on
top
of
a
hefty
origination
fee.
Sometimes
the
latter
includes
the
processor’s
work
and
isn’t
a
separate
line
item.

(photo:

kozumel)