It is the mortgage processor's job is to scrutinize a home loan application before submitting it to the underwriter.
Published July 14, 20203 min read
A loan processor reviews the mortgage application and ensures accuracy of all the information
Loan processors act as an intermediary between the loan originator and mortgage underwriter
Underwriters, not loan processors, determine final mortgage loan approval
You can help the loan process run smoothly by providing all the appropriate information when you apply for a mortgage
A loan processor, also called a mortgage processor, is the person responsible for processing your loan and submitting it to the underwriter for final approval. Processing the loan means reviewing the mortgage application, making sure the borrower has provided all the necessary paperwork, and that all the information is accurate.
When you take out a mortgage, a loan officer or loan originator is responsible for helping you choose the right type of mortgage. But once you submit your application, loan processing begins, which is the domain of the mortgage processor. Getting a mortgage requires a lot of paperwork and it’s the loan processor’s job to double-check all your personal information and financial documents. They contact necessary third parties (like your employer or the credit reporting agency) for verification and also arrange home appraisals.
If any information is missing, the loan processor alerts the applicant, either directly or through the loan officer. The loan processor wants to ensure that everything is submitted in a timely manner to the underwriter, who determines whether or not someone is approved for the mortgage. If you’re a borrower, you can help during the mortgage process by providing all the necessary (and accurate) information so the loan processor’s job can run more smoothly.
It is the job of the loan processor to prepare a potential borrower’s mortgage application before sending it to the underwriter. The loan processing begins after the application is submitted.
These are some of the responsibilities of a loan processor:
Collect and organize the borrower’s application and loan documents
Review and verify all information
Order a credit check and follow mortgage lending standards
Request any missing pieces of information
Contact any other relevant third parties, like appraisers, and insurance and escrow companies
Submit the final loan file to underwriting
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The mortgage loan processor reviews all the borrower’s paperwork, including the application and all relevant documents. Mortgage applications require a lot of personal information, financial information, and even information about the home. The borrower typically provides their Social Security number, bank statements, employment history, and more, and the loan processor must organize and confirm all of it.
They also order a credit report to make sure the borrower is a qualified applicant. Lenders may need to follow mortgage industry standards when it comes to a borrower’s credit score and debt-to-income ratio.
Next, the loan processor arranges a home appraisal to ensure the requested mortgage amount matches up to the home’s appraised value. They also contact any relevant third parties, including the title company, escrow company credit bureaus, and the IRS if necessary.
They gather all the documentation in one place, typically by creating a loan file in the lender's application system. If anything is amiss — unaccounted funds, missing tax returns, discrepancies in employment history — the loan processor requests more information. Depending on the mortgage lender, the loan processor may communicate directly with the borrower or relay the information to the loan officer or mortgage broker who initially helped them apply for the loan.
When all of the loan documentation has been completed, the processor finally submits the loan into mortgage underwriting.
Related article: Avoid issues down the road by reading our guide to the mortgage process before you apply for a loan.
The loan processor and loan underwriter are both integral parts of the mortgage process but they have different responsibilities and skill sets. While the loan processor can check and verify the borrower’s credit score, they cannot cannot assess the risk that someone poses as a borrower. That burden falls on the mortgage underwriter, who analyzes the borrower’s ability to make their monthly mortgage payments and ultimately decides on loan approval.
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