Loan Officer Training - 11/6/2024 - Effective Document Collection: Best Practices for Loan Officers

Document collection is a critical step in the loan process, but it can often be a source of delays, miscommunication, and frustration for both loan officers and borrowers. In this episode of Loan Officer Training, we dive into proven best practices for streamlining document collection and setting up your borrowers for a smooth loan journey. From initial borrower engagement to final loan approval, we’ll explore strategies to make document gathering faster, more efficient, and hassle-free.

Discover how to effectively communicate document requirements, organize checklists tailored to different loan types, and utilize technology to simplify the collection and tracking process. We’ll also cover how to coach borrowers on gathering the right paperwork, identifying common red flags, and addressing potential document issues before they impact timelines. By implementing these best practices, you’ll improve the borrower experience, reduce processing times, and strengthen your reputation as a proactive, detail-oriented loan officer.

Whether you’re looking to boost your productivity, improve client satisfaction, or optimize your loan processing workflow, this episode is packed with actionable tips to make document collection a stress-free part of the loan process. Perfect for new and experienced loan officers alike, tune in to become more efficient and deliver a seamless experience for every client!

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Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs i

Catch all the episodes of the Loan Officer Training Podcast at https://themortgagecalculator.com/Page/Loan-Officer-Training-Series-Podcast

Catch all the episodes of the Loan Officer Training Podcast at https://themortgagecalculator.com/Page/Loan-Officer-Training-Series-Podcast

Loan Officers for Unlimited Free Non-QM Leads & Trainings Join The Mortgage Calculator at https://themortgagecalculator.com/join

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as acc...

Transcript

Restream recording Nov 06, 2024 • 05:02:23 PM: 0:13

So we all know how hard it is to get these loan applications, right? And we know all the obstacles that we can face. We certainly do not want to add any additional impediments to the process, uh, by dropping the ball. Uh, in the document procurement stage, right? So, uh, let's get right into it. Luckily at the mortgage calculator, we have all the tools. So this should just be a refresher course for our team members. So let's get right into effective document collection, best practices for loan officers. So notice there, right there at the top. And center efficiency, accuracy, and clear communication combined with the use of technology can improve timeliness and client satisfaction. That is what we're talking about here. Uh, getting the job done, right? So what are some of the common challenges that we find in the document collection process? Well, Uh, and obviously these aren't all inclusive here. This is not an all inclusive list, but we are touching based on the, um, the most common issues is the first would be missing or incomplete documents, right? Uh, they're sending you three pages of a five page bank statement, um, two pages of the tax return. Only the first two pages. I mean, and then you're going back and forth. A bunch of times about what's actually needed, uh, client confusion about required documentation is another issue, uh, time delays that may be caused by incorrect documentation. And I'll touch base on the solutions on these in a minute as an expand on these. Insecure transfer, critical documents, inconsistent communication with all parties, and, and lack of transparency on the timelines. So, let's, uh, talk about, uh, a little bit more in these as we talk about, uh, What are the solutions or the best practices, uh, for, uh, document collection? The first one, uh, would be to empower your borrower And set clear expectations. This one is going to tackle the challenge of the lack of transparency on the timeline, right? You're going to empower your borrower. You're going, you're basically going to educate them on the process. Why you need what you need, right? As you go down the list of the product of the items that you need, right? You're highly recommended that you provide some type of a checklist depending on the loan type to the borrower. You could custom tailor your checklist. Uh, for the specific needs of that borrower, if you, uh, identified, uh, some additional issues outside of the, the standard required docs for that loan type. And in doing this, you're, you're, you're going to, like I said, you're, you're going to establish clear timelines. You're going to, uh, establish clearly why you need what you need and when you need it. This is very clear because you're going to initially discuss this checklist with your borrowers because then once you get that initial condition of approval from underwriting, you're also going to discuss that list of conditions with your borrower clearly, uh, to then restate what is needed. And why it is needed. You're just not gonna send them an email without any explanation. Uh, I like to send the email nice detailed and then followed up with a call so that we can go over these items, go over the conditions, go over the needed documents. One by one, explain what is needed, why you need it. What document that they need to provide to satisfy the condition. All very important. So we're talking about ways to avoid receiving missing or incomplete documents, right? We mentioned the checklist. We mentioned empowering the borrower, which is going to hopefully eliminate that client confusion about the required document. It's gonna add transparency on the whole process. very much. Uh, but, uh, we need to ramp, you know, we need to basically ramp this up. Uh, I guess I would like to say, put it on steroids and that's going to be through the use of a CRM or CRM software. You know, we, we have a great proprietary software that handles our quoting and it also handles our secure, uh, Document procurement, and it also handles a lot of these other recommendations like automate document requests and reminders, right? You know, our system, the CRM systems, whichever one you use, and ours in particular does this as well, will send out automated document request reminders every so often to the borrower. depending on what you have set up in the system. So in order for the CRM to properly work, whatever CRM system you use, you have to make sure that you have it properly set up. Uh, and then the, uh, so the customer can be receiving those document requests and the document request reminders, right? You're gonna go to the CRM. You're gonna load up. What you need from the borrower as far as documents, you're going to clearly state, uh, why you need those documents in the explanation, you're going to have your whole list, and then you're going to click to send a request to the, to the customer. They're going to get the email with the request with the list of items needed. They can click on the link. It takes them to the CRM where they can see all the items needed there. And then they securely upload the documents. The items that are needed. So that's the next bullet point. There is secure document upload storage and organization. Very important because the last thing you really want. The last thing you really want is to, uh, have borrowers emailing you for many reasons, right? It just breaks all of the tenets of secure document uploads, uh, document security of the customer private and personal information. And on top of that, I don't know about your email. My email can get a little crazy, uh, uh, during the day, a lot of stuff coming in at one time, uh, lot of, you know, different attachments all over the place, it's real easy, easy for an email to get missed for a bit. And then by the time you see it, uh, you know, Timeframes could have changed, right? Uh, or maybe it went into the spam and you didn't see it right away. Then you decided to check your spam at the end of the day. And lo and behold, there's that email that you were waiting for, or the, the document that you were waiting for the customer that you thought. You know, however you were going to get it. And instead they emailed it to you. Right. So, you know, to avoid all that kind of stuff happening to have a secure document uploaded, let's say for example, tax returns, you would never really want to borrow or emailing you tax returns or anything where there's social security number and other personal private information that could result in identity and identity theft. If your email gets hacked, for example. Uh, so again, secure document upload storage and organization and that goes hand in hand, especially if you have a processor on your loan and in all of our in house deals, uh, in all of our deals, but we're not done. We have in house processing. Uh, plus, uh, we may be working a deal together as a team and having the CRM to collect documents also allow it. It, it, it allows the documents to be easily tracked, received, and securely shared with other team members. So instead of emailing the tax returns to the processor or to another MLO that's working on the deal together with you for review, they could just access and download the document from the CRM where it was securely uploaded. Uh, by your borrower. So everybody can review the document. If management is looking to assist you with the file to review the income calculations, no need for you to email anything. Uh, the CRM can just easily be accessed by whoever has login credentials. The documents could be, could be reviewed in a secure manner without risking, uh, the borrower's personal and private information. Thank you. Right. I mean, I can't, I can recall a few times that, uh, that I have received credit reports, for example, via email, you know, what we've had to tell people, please don't, don't send a credit report. Uh, we can view it in the file. We can go into the CRM and we can download it from there and we can review. And that's the, one of the main reasons of having the CRM secure document, upload storage organization, easily track documents received and securely share with other team members. Human, um, uh, factor here is once you do have all the documents right in your secure portal, then remember to please review and verify all the documents, uh, are all the documents complete? Did you get every page of the bank statement? Did you get every page of the tax return? It's not the first. Someone has provided a bank statement and left out that blank page five of five because they thought that they didn't need it because it was blank. Well, you know what? Underwriting doesn't know that it's blank. We don't know that it's blank. Only they know that it's blank. So all pages of any document, if it says one of eight, we need all eight pages on there, regardless of it's three of the eight pages. Are blank or have no, no useful data. We still need it. So that's the same with tax returns. How many times have you only received the first two pages of a tax return? Right. And it turns out that the tax return could be 20 pages. All you got page one and two, but you're missing schedule one, schedule two, schedule three, uh, schedule C, schedule E and whatever other schedules may be applicable for that tax return. The Borrowers don't know. So you just got to remind them all in every single page, even what they may consider the junk pages. We need everything. And it's your job as the MLO to review every single document that is turned in by the borrower. Make sure if the document is actually what was requested for the condition, make sure that the document is complete. Make sure that the document is up to date. Make sure it's even correctly formatted. Is it, are we supposed to be turning in PDF only documents? Are you turning in a photo, a JPEG document? Are you turning the document in, in five individual JPEGs? And it's really supposed to be one five page PDF document. And if you're turning it, turning it in like that to processing, are you expecting processing to. Convert it to one document. Are you just expecting processing to just turn the document around, send it to underwriting like that as five individual photos of a tax return and expect then underwriting to merge the documents for you? No. The correct answer there would be if the borrower, by whatever unfortunate circumstance, ended up, for example, uh, sending you 20 photos Of 20 pages of five different bank statements. Unfortunately, you're going to have to convert those JPEG documents to a PDF. Uh, uh, file each one, and then you're going to have to merge those PDF documents each into each corresponding bank statement, if that's what you're trying to submit or whatever it is incomplete documents in PDF format would be the preferred, um, that's going to help processing and definitely going to help underwriting and mind you, uh, when you are putting those documents together, please give them. Proper names, because at this point, the document collection and ensuring that they're complete and accurate is also going to depend on the name that you give that document. Right. So if you got the 2023 W2 for borrower John Smith, don't leave the standard name that may come over last two years W2s and that's the name of all your W2s because you didn't change the name. Maybe the customer uploaded it into the portal. It keeps whatever name. Is on the document required condition. Uh, and then you didn't change the name to the specific document, the 2023 W2, 2022 W2, September, 2024 checking Wells Fargo versus the September, 2024 checking from chase, right? Uh, don't have every document have the same name and then have underwriting or processing trying to figure out what you uploaded because what you're going to get in that scenario is you're, you're going to get either, uh, an upset processor, uh, which is going to reject your documents or worse, you're going to get an upset underwriter who's going to reject your documents, suspend your file, and give you a whole laundry list of conditions actually needed. Okay. Um, and then you're going to be in an uphill battle. So, uh, procurement of documents sounds like it's a very basic function, but actually, uh, getting the loan application is just part of it. But then properly getting the file, uh, worked, uh, procurement of documents, uh, verification of documents, and then submission of documents in a timely manner is all going to really depend on the officer. Uh, again, following, uh, these steps that we have outlined here, pretty basic steps and, uh, keeping the, keep, you know, connecting all the dots, effectively communicating everything, uh, to the customers that at the end. It's a positive experience for everybody and your loan closes on time. So, I want to see if we have any questions there. I do see that we have one question. Are there document checklists in the Knowledge Center? Yes, there are. We have document checklists for all the different loan types, right? Conventional, DSER, bank statement, and the like. Let me see, we have another question here regarding, uh, naming of the documents, uh, when the document is in the system and it's being transferred to the Encompass file. Question is, is it possible that when we correctly name a document in the CRM, that when you click E File to Encompass, that the name you gave the document show as a name in Encompass? very much. The name on the document typically is, is going to be whatever you requested. So if it's a standard request, the standard request has a preset name on it. If it is a, uh, you put a request in the, um, the customized request, it's going to have a name on it. So when the file does get into Encompass, you are able to name the file. if you're not happy with the name that Encompass gives it. What happens is that most, most people don't change the name or just upload, uh, with a very basic PDF name. And that's the problem. The key is here is when your files get uploaded to Encompass, make sure that the name on the documents are correct. And if not, just please make sure you revise the name. And I don't see any additional questions. I'm going to give it another moment, but I guess the best takeaway from here is make sure that you properly use your technology that you already have in place. It's put in place there to help you complete your work in an efficient and timely manner to avoid these common challenges that you can face in the document collection process. very much. And to ensure, uh, a, a nice, uh, satisfying, positively satisfying experience for your borrower so that you can get, uh, referrals and additional business. All right. So I do not see any additional questions. So I do thank all of you for, uh, being on here today. And I look forward to, uh, seeing you tomorrow at 12 noon for tomorrow's training, have a great day.