“What we have seen is that if you have a set closing date you want to hit every month, with the regulations dates built into that, it is required that your underwriting and turnaround times stick to that set number of days,” says Scott Alexander, operations manager for Assurance Financial, a Louisiana-based residential home loan
expert. “In other words, if you are going to fluctuate your turnaround times, that can cause a big issue on the back end.”
When certain timeframes for the loan process are set, loan officers work the field based on the turnaround times advocated. So when the timeframe changes from three days to five days, for example, that can cause a large delay in the closing. “What we say is – hey, our turnaround time is always going to be X number of days,” says Alexander. “We are going to make sure that our underwriting turn times don’t fluctuate and that the times stay the same so we can always hit the closing date at the end.”
According to Alexander, TRID has caused Assurance Financial to strengthen their own standards when ensuring loans meet the various and unique requirements set for them respectively. “It may take a little longer to get loans through the pipeline because of the regulations that are in effect but that is not necessarily a bad thing. You want to make sure that you originate a compliant loan up-front as opposed to having to deal with issues on the back side.”
To help underwriters avoid those regulatory roadblocks that can cause headaches in the loan process, Assurance Financial is gradually moving into a more paperless environment. The technological improvements that encompass the company’s operating system allows underwriters to have easier access to documents and files with less obstacles, says Alexander.
One thing that Alexander points out is that underwriters should be mindful of the preparations that need to be made in order to close a loan for the borrower – such as making sure the loan meets all guidelines, regulations and overlays that exist – without hitting complications along the way to ensure the loan is closed seamlessly in the end
“Gather all the information you need for the 1003 and make sure you ask the borrower all the questions necessary to qualify them for a loan,” he says. “It takes time to approve a loan. It is not something that can be done quickly so it is important to take the time to look at it and understand the borrower. By keeping times consistent, everyone knows what to expect and can work accordingly and that is what we always try to do at our company.”
Amid the regulation changes that have occurred over the last year, greater constraints have been placed on time periods required prior to closing on a loan. In the wake of tightened industry standards, consistency is the key when seeking to close a compliant and successful loan.