What happens to your loan application and supporting documents after they are sent into the lender?


The file goes through setup first. The file is reviewed to make sure it is compliant, i.e. the loan package and disclosures were sent timely and are in order, the minimum credit documents are submitted, such as W2s, tax returns, paystubs, and bank statements.


After it passes setup, the file gets in line for underwriting. The underwriter reviews the file to see if it meets investor guidelines. The investor is the one who will purchase the loan. Most loans are sold in the secondary market, purchased by investors subject to compliance with their guidelines. Investors could be Fannie Mae, Freddie Mac, or other financial institutions, such as hedge funds.

The underwriter makes a decision after review as to whether the file is approved, suspended, or denied.  At that point, they issue a list of conditions or stipulations that need to be met in order for the loan to be saleable to the investor. The loan originator will contact the borrower to obtain anything else that may be needed. The documents are sent back to the underwriter for final review.

Final Review

The underwriter reviews the file for final compliance with investor guidelines. Once the loan is final approved, the loan docs are drawn and sent to title for signing and closing.

There are compliance documents that need to be signed along the way, too i.e. the Loan Estimate and Closing Disclosure. See our blogs on these for more info.

Contact us and we can help you through this process.


Check out these corresponding articles:

Loan Approval

Loan Suspension

Loan Estimate

Closing Disclosure

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