Mortgage Processing and Underwriting Procedures Prior to Automated Underwriting

Written By: Hina Habib

As we all know, until the late nineties when there was no concept of an automated underwriting system, processors had to manually process and underwriters had to manually underwrite a file.

The normal time frame between a loan officer getting a loan file, then processing and underwriting, used to be more than five weeks. This is how the procedure was back then. Once a loan officer used to get the file he had to complete the application and print all required disclosures. The next step was to take these disclosures physically to the borrower or make an appointment with the borrower in the mortgage office to complete the application. Hence there was no privilege of emailing disclosures to the customers, as lenders always looked for original signed documents.

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After completing the application, the loan officer used to hand over the file to the loan processor for processing. Once the file was handed to the processor, she would review the file and request all verifications including the title and appraisal orders. These orders and verifications used to be requested either via fax or most of the time by mail. Verifications used to come back in 5 to 7 days. The title order also used to take 2 weeks and the same time frame applied for appraisals. If for some reason the request for verification was lost in the middle somewhere, then the processor has to re-send it. Three major required verifications were VOR, VOE and VOD.

Once the appraisal, title and all other verifications were received by the processor, she would compare this information with the application. She would make all corrections and make sure ratios and documents in the file were within Fannie, Freddie or FHA guidelines.
The file was ready to go once it was made sure all the required information was in the file. All wholesale lenders required one original and one copy package of the loan application. Underwriters always required original appraisal, original VOE, original VOD and original VOR in the original package. For FHA loans, lenders also required to see the received mail envelope for verifications of employment, deposit and rent. Bank statements also needed to be original with complete pages. Hence original package contained all original documents along with original signed disclosures.

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Loan packages were sent through FedEx to the lender for underwriting. After underwriting submission of at least 72 hours, underwriters would fax the decision on the file. For the conditions, the same rule applied that underwriting required original documents. After the processor obtained all conditions, they would be sent via FedEx to get clear to close on the file.

Of course comparing with today’s underwriting and processing procedures it is very obvious that we are saving more time with automated system, therefore helping more customers in less time.

About The Author

Hina Habib - As an NAMP® staff writer, Hina Habib has been working as a Loan Processor with mortgage industry for more than 15 years now. Hina is a loan processing instructor for Loan Processor University ( She has ample experience of structuring and processing FHA, VA and Conventional loans. She worked with an established Correspondent Lender/ Mortgage Broker for 13 years. After her promotion as a Senior Loan Processor she trained loan officers and other processors. Currently she is working with a strong and established banking institute as a Mortgage Processor II. She is very well informed with the current on going changes in the mortgage history and can help answer your questions more accurately. If you're interested in becoming a writer for NAMP®, please email us at:

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