FHA Loans - FHA Loan Processing

The loan processing of your file is the most time consuming aspect of the loan process. This is the preparation of your file for presentation to the FHA investors. All documentation is reviewed to insure there is no discrepancies in presentation and any possible issues are worked on at this stage.

If at your initial application you did not provide all of the original documents needed, this is the stage where they will be requested for again.

The processing stage is comprised of gathering all of the following documents.

* FHA Case Number - We will request from FHA a FHA case number. If a condo, PUD or townhome, will need to verify property is an FHA approved complex. If property was previously in escrow, may need to request case number from other lender. Usually 1-2 days.

* Verifications of Employment - Form sent to past and present employers for last two years to verify income and time on the job (some employers have an automated 900 # for employment verification). Unusually takes 1-2 weeks.

* Verifications of Deposit - Form sent to banking institutions to verify average bank account balances for past 3 months (some banks will charge borrower a fee of up to $20 for this verification). Usually takes 1-3 weeks.

* Credit Report - May need to order a full factual credit report which is the three major credit report bureau's blended onto a single report, with all accounts and balances verified. Usually takes 2-5 days.

* Escrow Instructions* - Escrow instructions are drawn up by the escrow company detailing the transaction details. Escrow is an independent third party of the transaction who acts as the accountant. *California, some states use   closing attorney's or title companies. Usually takes 2- 7 days.

* Preliminary Title Reports - This comes from the title company who will insure the title of the home. They research the property and borrower for any legal items, liens, loans that may affect title to the property. Usually takes 1-2 weeks.

* Appraisal - Appraisal will be order from a FHA approved appraiser. The appraiser will go to the property, measure square footage, verify FHA required conditions, check other recent comparable home sales, and determine value of the home. Appraisals usually take 1-4 weeks to complete.

* Purchase Contract, Counter Offers, and Transfer Disclosure statements - This is for purchase transactions only. This are the original contracts regarding the terms of the purchase of the property. We need all of the completed signed (by both parties) forms prior to ordering the appraisal, as appraiser requires a copy of the contract. This will typically be provided by the realtors. Usually takes 2-10 days.

* Letters of Explanation - Letters written and signed by borrower to explain any issues on the credit report, work history, bank account deposits or variances, source of funds, etc. Usually complete after receipt of all other documents.

* Additional supporting documents - Additional paperwork possibly needed on a case by case scenario, such as: 12 months cancelled checks to verify not making payments or receiving income, complete bankruptcy, divorce, child support papers. This will vary by borrowers individual scenario.

* Any Documents missing from initial loan application - Any paperwork missing from original loan application and loan opening such as: 2 months recent paystubs, 3 months complete bank statements, last 2 years tax returns, etc.

Since we are requesting and receiving all of these documents from various companies and individuals, this is most often where there is delays. This portion of the loan process will normally take 1 to 3 weeks.

Once the we have received all requested documents from all parties, you loan can then be fha home loans submitted.

FHA Loans - FHA Loan Submission

Once the loan processing has been completed and we have received all needed documents, the loan is then submitted to the investor for underwriting. This part of the process usually takes two days.

* day one for the loan to be overnighted from our office to the investor.
* day two for the investor to log it into their system and assign it to an underwriter.

Next the loan will go into fha home loans Underwriting.

FHA Loan Underwriting Process

Once your file has been submitted to the investor, it will be underwritten. This is when an underwriter will review your file and render a loan decision. This portion of the loan normally take 2-5 days.

The underwriter will review of the information and make sure that it conforms to the guidelines that FHA has set forth. The underwriter will review all of the following aspects of the file:

* Income and Debt Ratios

* Employment History

* Credit History

* Savings / Source of Money for Down Payment

* Appraisal

FHA Loan Approval Process

Once your loan is approved, there may be some updated or additional information needed to proceed to the closing of your loan. During this time any items (commonly called: conditions) will be requested and provided to the investor for review.

Once these remaining conditions have been provided and reviewed by the investor you loan can move to the next stage fha home loans Loan Documents.

FHA Loans - FHA Loan Documents

The loan document process is the stage when your loan documents are being prepared by the investor. These loan documents are the legal binding documents to finalize your transaction. They will include some of the following important items to be signed:

* Note - Promissory Note indicating amount borrowed, interest rate charged, and terms or repayment, and the monthly payment amount.

* Deed of Trust - this documents places the property as security to the loan and note. (recorded with county recorders office)

* HUD 1 - this document is the itemized break-down of all fee's incurred for obtaining the loan.

If the interest rate has already been locked-in, the loan documents are drawn by the  document person. Once the loan documents are printed, they are then overnighted to the escrow company, who then will contact the borrower to set-up an appointment to sign the loan documents. This process from document order to signing will normally take 2-5 days.

Some lenders, like FHA-Home-Loans.com, Secure Funding are currently using technology to have this documents delivered via email which can help save time.

Once the loan documents have been signed they must then be overnighted back to the lender to set-up the loan funding.