Loan Processing Checklist

Confirm the Uniform Residential Loan Application (Form 1003) is fully completed and signed by all borrowers. Verify loan purpose, occupancy, subject property address, and requested loan amount match the purchase contract.

Collect government-issued photo ID for each borrower and run the Patriot Act / OFAC screen. Confirm SSN, current address, and phone number on the 1003 match the ID and credit report — mismatches stall underwriting later.

TRID requires the Loan Estimate be delivered or placed in the mail within 3 business days of a complete application (the six pieces: name, income, SSN, property address, estimated value, loan amount). Missing this window is a CFPB-reportable violation.

Capture FCRA-compliant authorization before pulling credit. eSign through Encompass, Floify, or your LOS — verbal consent does not satisfy the FCRA permissible-purpose requirement.

Collect 30 days of paystubs, two years of W-2s, and (for self-employed or commissioned borrowers) two years of personal and business tax returns with all schedules. Fannie Mae / Freddie Mac require the most recent year filed plus YTD P&L for self-employed.

Self-employed borrowers (25%+ ownership) need additional documentation: business returns, K-1s, CPA letter, and a YTD P&L. W-2 wage earners typically clear with a verbal VOE and recent paystubs.

Pull two years of business tax returns (1120, 1120-S, or 1065), K-1s for partnership / S-corp owners, and a current YTD profit and loss statement. Run the Fannie Mae Form 1084 cash flow analysis to calculate qualifying income — net income alone usually understates true cash flow.

Fannie Mae requires verbal verification of employment within 10 business days of the note date for salaried borrowers and 120 days for self-employed. Call HR using a number from a third-party directory — not the number on the paystub. Document name, title, and date of contact.

Order the tri-merge from Experian, Equifax, and TransUnion through your credit vendor (Factual Data, CIC, MeridianLink). The middle FICO is the qualifying score; for joint applications use the lower middle score across borrowers.

Submit through Desktop Underwriter (DU) for Fannie or Loan Product Advisor (LPA) for Freddie. Conventional caps DTI around 45-50% with compensating factors; FHA allows higher with manual underwrite. Document the approve/eligible findings in the loan file.

Active disputes on derogatory tradelines must be removed before closing — DU rejects them. Pull a Letter of Explanation for late payments, collections, and recent inquiries. Document any rapid rescore activity if scores need to clear minimum thresholds.

Refer / Refer with Caution findings require an underwriter manual review with documented compensating factors — reserves, low LTV, residual income. Build the credit narrative before submission; LOEs alone rarely flip a refer.

HVCC / Dodd-Frank requires appraisal orders go through an Appraisal Management Company — never direct contact between LO and appraiser. Confirm the AMC is on the lender's approved panel and that the appraiser is licensed in the subject property's state.

Confirm appraised value supports the contract price; an appraisal gap triggers the financing contingency or buyer cash-in. Check for FHA / VA condition callouts (peeling paint, missing handrails, roof life) that require repairs before closing.

Options on a low appraisal: seller reduces price, buyer brings additional cash to cover the gap, parties split the difference, or buyer terminates per the appraisal contingency. Get the resolution in writing via amendment before the appraisal contingency expires.

Pull Schedule B-II exceptions: liens, easements, encroachments, judgments, unreleased mortgages. Coordinate with the title officer on payoff letters and lien releases. Confirm legal description matches the contract and the survey.

Work the prior-to-doc and prior-to-funding condition list — updated bank statements, gift letters with proof of donor funds, hazard insurance binder, HOA certification. Each condition needs underwriter sign-off before the CD goes out.

TRID requires the borrower receive the CD at least 3 business days before consummation. Changes to APR (more than 1/8%), loan product, or addition of a prepayment penalty restart the 3-day clock — a common cause of closing delays.

Wire fraud is the largest single loss category in residential closings — FBI IC3 reports billions annually. Call the title company at a number pulled from their website (not from the email) and verbally confirm wire instructions with the borrower. Never accept wire changes received by email.

Coordinate borrower, seller, agents, and settlement agent on time and location (or RON / hybrid eClose). Remind borrower to bring government photo ID and confirm cashier's check or wire receipt for cash-to-close.

Confirm wire is sent, settlement statement reconciles to the CD, and recording is submitted to the county. Deliver final signed package to post-closing for QC and investor delivery within the lock period.