What is a mortgage processor, and what do they do?

A mortgage processor is responsible for assembling, administering and processing your loan application paperwork before it gets approved by the loan underwriter. They play a key role in getting your mortgage loan request to the final close.

If you’re currently planning on buying a home or you’re in the process of doing so, it’s important to know what the responsibilities of a mortgage processor are and what they’ll provide during the lending process.

What is a mortgage loan processor?

A mortgage processor sets borrowers up with the proper documents for the loan program they want to use. They guide borrowers through the first step of loan processing. Once the paperwork is finalized, the mortgage processor then passes the loan files through to the underwriter.

What does a mortgage loan processor do?

A loan processor helps streamline the process of applying for a home loan by organizing and preparing information for the underwriter to review and approve. The steps can be quite complex, but the loan processor helps you find the right loan for your budget and needs.

Here are some of the core tasks a mortgage processor performs:

They collect your financial documents

Collecting and ensuring that financial information is in order is a loan processor's most important responsibility. This step includes confirming that the correct documents are present and contain the accurate information the underwriter needs to approve your loan request. This includes tax returns, W-2s, gross monthly income, proof of insurance, bank statements and evidence of assets and debts.

They analyze your credit report

Loan processors order and examine your credit report by looking for any inaccuracies, late payments and collections. From there, they collect letters of explanation from you for further understanding of your credit history.

Having a good credit score increases your likelihood of getting approved for a home loan. The loan processor looks to see how you’ve handled paying past bills to confirm you can pay off future mortgage payments.

They order the title search and appraisal

The loan processor will order a title search and a professional appraisal. They’ll want to ensure the home doesn't have any liens and that it’ll appraise for the amount the borrower is requesting for the loan. The underwriter won’t approve the loan if there are liens or the house’s appraised value is lower than the loan amount.

They track your deadlines

Your processor keeps track of certain deadlines of your mortgage application timeline to ensure you close on your house on time and avoid any unnecessary fees. The timeline includes finding a home and making an offer, the home appraisal and completing the mortgage underwriting and final loan.

They work with the loan underwriter

Loan originators work directly with the underwriter to finalize the application process. They’re responsible for transitioning all of the compiled loan documentation to the underwriter for final approval. This is when they may reach back out to you about any discrepancies found that will need to be addressed before the underwriter will give final approval to close.

What happens during mortgage processing?

When applying for a home loan, the buyer works with a loan officer or mortgage broker, who acts as a mediator between borrowers and lenders. Once you apply for a home loan, the time between applying and closing is known as “mortgage processing.”

The lender reconfirms the home buyer’s records during mortgage processing to ensure the accuracy and completion of all the necessary data. The process entails verifying the buyer’s information, ordering their credit reports and scheduling a home appraisal. The data found will determine your loan approval status.

Loan processor vs. underwriter

Although both the loan processor and the underwriter are involved in the mortgage application process, the two roles have separate duties. The loan processor makes sure you have all of the proper loan documentation organized to apply for the loan. The underwriter’s role is to analyze whether you’ll be able to make the necessary monthly mortgage payments and decide if the loan will be approved.

Loan processor vs. loan officer

A mortgage loan officer and a mortgage processor are often confused for the same position. However, it’s important to understand that they hold separate responsibilities in the loan application process. A mortgage loan officer is a licensed mortgage expert who helps navigate the borrower through the loan application process.

The loan officer will recommend the type of mortgage loan program that fits the borrower’s financial needs. Once the borrower decides on the loan terms, type and size, the information goes to the mortgage processor, who then files the paperwork.

Basically, a mortgage processor acts as the go-between between the loan officer and the underwriter.

These three key positions work together when pushing a mortgage loan request through, each with a unique set of responsibilities.

How to become a mortgage processor

The key to becoming a loan processor is developing a skill set that is diversified and works well in the financial industry. Gaining as much experience as possible through on-the-job training sessions and online financial courses will set you up to be more of an appealing hire. Let’s review the steps you should take to become a loan processor:

1. Earn a high school diploma. This is usually a minimum educational requirement at many loan companies.
2. Earn a higher-level degree. It’s highly recommended to graduate with at least an associate degree in a related subject, like finance, banking or business. This allows you to gain a stronger understanding of the basic concepts of financial management and banking practices.
3. Receive your mortgage license. You’ll need to complete the National Association of Mortgage Processors (NAMP) online mortgage processing training and test to receive your mortgage license.
4. Obtain employment. A loan processor works at places like credit unions, mortgage lenders and banks. From there, you’ll want to receive on-the-job training. It’s recommended to obtain computer software, information processing and communication skills.
5. Work your way up. The longer you stay in the field, the easier it’ll be to advance.

The bottom line: Mortgage loan processors help you reach closing day

Just like underwriters and loan officers, mortgage processors are a crucial part of the mortgage process. Working with a mortgage processor can help you get everything organized for underwriting and keep your application on course for closing.

Ready to get your financing in order? Start your mortgage application with the Home Loan Experts at Rocket Mortgage^®.