Your mortgage loan application consists of

property information, credit information about your assets and liabilities, and personal information, including histories of your residences and employment.You must provide this information and sign and date your application before your mortgage company can begin processing your application. You are also required to sign verification forms to authorize confirmation of the information in your application. In addition, there may be some information which you must provide directly, such as copies of tax returns, purchase agreements for your new and your present home, explanations of prior payment histories, gaps in employment and other information. When applying, your mortgage company will require that you pay a fee to cover their out-of-pocket expenses such as appraisal and credit report fees.

Processing Your Application

After you have provided the initially requested information, your application is given to a loan processor. The loan processor mails requests for verification of income, assets, liabilities, and credit history; and orders a credit report, an appraisal, and a title insurance binder. Your mortgage company relies on third parties to complete verifications, issue a title insurance binder, provides credit reports and appraises the property. Accordingly, the processing time is related to how completely and promptly the information your mortgage company requests is provided to them. If third parties are unable to provide your mortgage company with the information or do not cooperate, your mortgage company may request documentation from you to enable them to process your application. It is your responsibility to provide information and documentation in a timely manner. When all necessary information is received, the loan processor will assemble the information in a file and then submit it for a credit and property review. This is also known as an "underwriting review." The underwriter will examine your file for compliance with mortgage insurance and your mortgage company guidelines. At a minimum, the file must adequately demonstrate each of the following: 1. A HISTORY OF ADEQUATE, STABLE AND RELIABLE INCOME SUFFICIENT TO REPAY THE LOAN; 2. A SOURCE OF LIQUID ASSETS FOR A DOWNPAYMENT, CLOSING COSTS AND REQUIRED CASH RESERVES; 3. YOUR ABILITY TO ACCUMULATE SAVINGS AND MANAGE DEBT; 4. THE VALUE AND MARKETABILITY OF THE MORTGAGED PROPERTY; 5. THE PROPERTY VALUE SUPPORTS THE AMOUNT OF THE LOAN. 6. COMPLIANCE WITH ALL ZONING AND CODE REGULATIONS, AND ALL YOUR MORTGAGE COMPANY GUIDELINES.

If the documentation in your file is complete and substantiated

the underwriter will decide whether to approve or deny your loan
application. Occasionally, additional clarification or substantiation
is required before a decision can be made.
If your application is denied, you will be notified and given the
reasons for the denial. If your application is approved, the approval
may be subject to certain conditions, such as proof of the sale of your
present home or proof of payoff of certain debts. These conditions
must be satisfied before closing in a form acceptable to your
mortgage company.
To close the loan, you must provide evidence of title to the property
sufficient to enable the title insurer to issue a lender’s title
insurance policy. The policy must be obtained from a title insurer
approved by your mortgage company. Your title cannot be subject to
any liens, encroachments, encumbrances or other items that may prior to or impair your mortgage company interest.
Obtaining an acceptable lender’s title policy involves the following
1. The abstract or certificate of title is provided to the title
2. The title insurer updates the abstract or Registered Property
Abstract (RPA);
3. The title insurer issues a title binder;
4. The title insurer completes searches for delinquent taxes or
outstanding judgments;
5. The title closer obtains the title binder and determines the items
which must be resolved to clear title;
6. You and/or the current property owner are notified of potential
title defects which must be resolved to close and what
documentation is needed to satisfy the title insurer;
7. You and /or the current property owner must provide the closer
with the necessary documentation to satisfy the title insurer;
8. The closer conducts the closing and all mortgage documents and
other related documents are signed;
9. The mortgage documents are submitted to the county offices for
10. After the recorded documents are returned by the county offices, the
title insurer will issue a lender’s title insurance policy. Colorado Springs

Several parties are involved in the title examination and clearing title.

Abstracts must be updated, and indexes and records of several governments
agencies must be searched. Your mortgage company depends on abstract
companies, title insurance companies, and county offices for these
updates and searches, and have no control over when updates and searches
are completed.
Your mortgage company cannot anticipate title defects prior to the examination
. You may be asked by the title insurer to provide documentation to meet the requirements for a clear title.

It is your obligation to provide,

in a timely manner, the information required
by the title, insurer to issue a lender’s title insurance policy.
The lender’s title insurance policy protects your mortgage
company, not you. If you have any questions or concerns regarding the title to the property, you should consult with a lawyer or call a title company. In Colorado Springs, I recommend  Land Title at (719) 268-0413 .

John DeBrito

SOLD Real Estate Company