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The mortgage lending industry is constantly changing. With that in mind, we provide an outlet covering strategic and operational issues relevant to mortgage lenders. Our insights are obtained through hands-on work with clients and vendors.

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Disclosure Delivery – Who’s the Lucky Winner?

Posted by Daryl Jones on Feb 28, 2018 1:45:32 PM

I get asked all the time who should be sending disclosures and where does it make the most sense? The discussion could be around initial, re-disclosures or closing disclosures (CD’s), but it doesn’t matter as it comes up everywhere.


This is one function where it’s tough to say there is a definitive best practice. The best practice is to make sure you have your most competent staff assigned to doing these. Most of the time processors will support the initial disclosures and re-disclosures and closers will send the CD’s. This is the most common approach and works well for most, but not all.


Some mortgage shops tend to staff their processors with more entry-level talent who can properly manage the file or track down follow-ups, but not necessarily the caliber of individual to be trusted in getting disclosures out the door. In that case, the loan officers or underwriters are next in line as the most competent to take this on.


Some mortgage managers don’t want their loan officers anywhere near disclosures which is completely understandable. However, some feel the LO’s are their most competent asset and in reality should know the mortgage business in general the best, as well as each specific deal. It could also be the underwriters as they are typically one of the most competent members of the team to be trusted with doing a quality job while maintaining compliance. However, this is not something I see frequently, but it does happen, and in most cases is working well. Another alternative is to have a centralized disclosure desk, if your shop is big enough to support it, which is an entirely different discussion.


Sticking to a specific model just to be comparable to the lender across the street doesn’t ensure efficiency. If your model is to hire green processors for entry-level pay, then you will likely be unable to task them with disclosures.


The best bet is to make sure to have your most competent staff in charge of disclosures as they will be more efficient and compliant, regardless of their title.


In Cornerstone vernacular, disclosures are a processing function, regardless of who is doing it in the organization. Disclosures include both initial and all re-disclosures, sans CD’s as that is a closing function. According to our most recent Cornerstone Reports for both banks & credit unions, processors should be working roughly 20+ applications per month and underwriters should be working 50+ files per month.

Bottom line, every shop has a different model, different market needs, and varying levels of expertise, so don’t worry as much about how the lenders across the street are managing disclosures as long as it works for you. But it must be efficient and accurate!

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Topics: mortgage lending, mortgage disclosures