Written By:
NLP Staff Writer

Selecting the right contract processor is not an easy task, to say the least. There are many factors which go into finding a qualified contract mortgage processor, such as experience level, knowledge, prior loan processing training, good references, etc.. Here we discuss a few tips that may help you, as the broker, to locate the right contract processor.

1) Make sure to interview the contract processor thoroughly before signing up.

2) Make sure the loan processor is knowledgeable in all types of loans: i.e. conventional, sub-prime, FHA/VA and even commercial loans.

3) Make sure the processor can handle loans in most states. Some states do require a contract loan processor to be licensed, but most do not. So it's important to find processors who can handle your loans semi-nationwide.

4) Outline Expectations UP-FRONT. Make sure that you and the contract processor know what they are to do and what you will be doing as the loan originator in the process. You do not want a "yes man" as a processor. Instead, you want a processor who knows where his/his bounderies are and what they should and should not be doing. The same goes for you as the mortgage broker.

5) As an exstention of #4, hold an initial orientation call with the contract processor. Here you BOTH can outline expectations, so as to help minimize confusion in the long run. And as the broker, you do not want the processor to do anything that might constitute or fall under loan origination. For example, the loan processor should NOT lock the rate, run DU/LP or even send out disclosures. In most states, this can be constued as loan origination and if your files get audited, you and the contract mortgage processor can get into a lot of trouble.

6) Perhaps ask that the processor has E-O insurance. It's not imperative, but's not a bad idea either. This helps to protect both parties from a lawsuit arising out of borrower mortgage fraud.

7) Contracting with a Bilingual loan processor is not a bad idea either.

I hope this helps.... till next time.

- NLP Staff Writer

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