What is Contract Processing? | The Mortgage ProcessorsJul 22, 2021
Contract processing is the process of reviewing and approving loans for closing. It usually includes input from various departments, such as underwriting, accounting, legal, and operations. Contract processors are responsible for signing off on each loan before it can be approved to close. It is the final step in the mortgage lending process that ensures all aspects of a home loan are complete. For example, contract processors have to make sure all proper documentation has been submitted and go through contingencies such as bankruptcy or divorce before approving the loan and letting it close.
What does a Contract Processor Do?
The contract processor reviews title insurance policies, ensures that all necessary signatures have been collected for each document, verifies lender requirements are met, and makes sure there aren't any errors in legal documents before sending them off to the underwriter. Contract processors must be good at many things. These things include mortgage lending rules and regulations, real estate law, capital markets knowledge, and finance theory. They also need strong attention to detail skills with exceptional reading comprehension ability.
The processor brings all of their expert knowledge about lending guidelines, rates, and closing costs, so that when it’s time for them to step in on behalf of your lender or company insurance provider, they will be able to provide insight only an insider would have regarding how best to accommodate all parties involved. They act as a go-between and mediator to make sure that everyone is on the same page, communicating throughout to make sure that a favorable outcome is reached.
Benefits of Using a Mortgage Processing Company
Outsourcing contract processing of mortgages to an outside company can be a great solution for many businesses. One benefit is that, if the mortgage industry is not your core business, you wouldn't have to invest in expensive equipment or software and hire staff internally to manage contract production needs, which reduces your costs and allows you to focus on generating new loans and client relations.
Another potential advantage could be that it allows companies with high volumes of contracts to output many loans and satisfy all of their customers. This way you can scale up as the company grows in size and have lower overhead, especially when times are slow.
Final Food for Thought
Contract processors are the unsung heroes of the mortgage industry, as they are responsible for organizing paperwork from the borrower and making sure they are in the required format so that underwriters can make quick decisions about a request to borrow money from them. Using a mortgage contract processing company, like The Mortgage Processors, can help you process the loan quicker, and make sure that you stay on top of this very confusing process through every step. From loan applications all the way up until closing, our team is dedicated to helping the borrower and loan officer succeed. As always, please don't hesitate to reach out to us for more information. We love chatting with you!
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