Loan Transaction Checklist — California

Loan Transaction Checklist By Brian Martucci

Ask the below questions of the lender on your sale or listing. The dates are approximate depending on what deadlines are written into the sales contract, and the volume and turn time for the lender:

DAY *1:

  • Has the buyer made loan application, and gotten you all the paperwork you need? If not, what is missing?
  • Have you warned the buyer not to make any large purchases or credit card transactions during the process?
  • May I have all of your contact information, as well as your loan processor?
  • Was the buyer’s interest rate locked? What were the rate, any points, loan type and lock-in term (30 days, 45 or 60 days)?
  • If the buyer is working with a broker ask: “What bank is the loan being brokered to? Is this a bank you use frequently? Do you have experience with this AMC (Appraisal Management Company) as to turn time and proper valuations?”
  • If the buyer is working with a bank, credit union or mortgage banker ask: “How has your AMC been delivering lately on turn times and values? When can I expect the appraiser to do the inspection? How many days after the inspection will the appraisal typically be delivered?”
  • Has the loan been run through any automated underwriting (AU) system, with satisfactory results?
  • After automated underwriting (AU) was done, was there any PIW (Property Inspection Waiver) or Limited Review (applicable only to condos) that was granted?
  • Is there a termite inspection required on this loan? If so, how many days before settlement is it required?

DAY *3:

  • Has the appraisal been ordered? What is the expected date of completion of the appraisal?
  • If the subject property is a condo has the condo questionnaire been ordered?
  • Has the 4506 and Social Security Verification been ordered?
  • Have you ordered what you need from the title & escrow companies?
  • Has the buyer gotten you all the paperwork you need? If not, what is missing?

DAY *10:

  • Are you ready to submit the loan for loan approval? Has the loan been thoroughly analyzed for:
    • acceptable credit scores
    • any large, unexplained deposits on bank statements?
    • is there sufficient “cash to close”?
    • any odd deductions on pay stubs?
    • any gap in employment that is troubling? (60 days or longer needs to be addressed, 6 months or longer can be a problem).
    • any credit blemishes or low credit scores that are a cause for concern?
    • any appraisal repairs, value issues, or problem with comparables?
    • if buyer self-employed do they show sufficient income on tax returns?
    • if the subject property is a condo does everything related to the condo look satisfactory?
  • What is the estimated turn time for:
    • Underwriting
    • Loan condition review
    • Preparation of closing docs

DAY *15:

  • When you hear the loan is approved, ask to see a copy of the “Commitment letter.”
  • Review all conditions with the lender to see which ones apply to your client, which are title & escrow conditions, and which are internal to the lender. Make sure you understand what each one means.

DAY: *18

  • Has the buyer gotten you a satisfactory homeowners insurance policy? If the subject property is a condo has the buyer gotten you a satisfactory HO6 insurance policy?
  • Has the title & escrow company gotten you satisfactory title work, escrow instructions, etc?
  • When can we expect closing docs to be sent to the escrow company?
  • When can we expect the loan to fund?