In this blog, we will be covering the QC Review Prior Clear To Close During Mortgage Process by some mortgage lenders. The mortgage application and approval process starts when borrowers submit all of their financial and credit information to the mortgage lender. The mortgage process starts once the borrower is pre-approved and submits an executed real estate contract.
Table of contents "Click Here" ToggleIn order to advance the mortgage loan application and prepare it for underwriting, the mortgage processor is responsible for requesting and assembling the required documents. Subsequently, the mortgage underwriter will issue a conditional approval for the mortgage loan. Once all conditions are met, the underwriter will provide a clear to close. However, in certain mortgage lending institutions, the underwriter may only issue a clear to close after the file undergoes a QC review prior clear to close stage. The QC review prior clear to close, serves as an additional step to verify that the original underwriter has not overlooked any details. Typically, this process is swift and does not take as much time as the initial mortgage underwriting process. Get Help For Mortgage Loan Application Process, Click Here
All documents get reviewed and crossed checked and processed by the assigned mortgage loan processor: Once the processor compiles the file and submits it to the lender’s underwriting department. The mortgage underwriter gets assigned to the file. The underwriter then underwrites the loan application. If everything is good, the underwriter will issue a conditional mortgage approval. Conditional loan approval will have conditions necessary for the underwriter to issue a clear to close.
Mortgage Conditions can be things that need to be reviewed and checked off by underwriters in order for the issuance of clear to close. Examples of conditions are the following:
Once borrowers submit all the conditions, the processor prepares the file for clear to close. Underwriter checks off all of the items received to see if they can issue a clear to close. Most mortgage companies will have the underwriter issue a clear to close. However, there are some lenders where the file that has been underwritten by a mortgage underwriter needs to go through the company’s Quality Control Desk prior for the original underwriter to be able to issue a CTC.
In the mortgage approval process, the primary objective is achieving a clear to close. This indicates that the lender is prepared to generate documents and fund the loan. Various lenders follow different policies in granting a clear to close. While some lenders permit mortgage underwriters to issue it upon approval of all conditions, others have a QC Review process that follows the initial clearance of conditions by the original underwriter.
Not all mortgage companies incorporate a distinct Quality Control Underwriting Process. A QC review prior clear to close occurs when an additional mortgage underwriter evaluates the file, essentially scrutinizing the original mortgage underwriter’s work. Underwriters ensure the accuracy of everything verified by the initial underwriter and confirm that all conditions are in order—a sort of second pair of eyes. Once the QC review prior clear to close receives approval, the lender can proceed to authorize the closing department to prepare documents and schedule the home closing. Nevertheless, after the mortgage loan underwriter declares the mortgage loan application clear to close, it undergoes assessment by a QC review prior clear to close underwriter.
Depending on the mortgage lender, a QC Review Underwriter is often a different underwriter that cross-checks the original underwriter’s work: The QC underwriter goes through everything the original mortgage underwriter has done to see that there are no errors. The QC review underwriter often times will run a soft credit check pull to make sure borrowers have not incurred any additional debt. Also makes sure there are no fraud alerts issued. Once QC review underwriter signs off on the QC review, it goes back to the original mortgage underwriter for them to sign off on a clear to close. The QC review process normally takes 24 to 48 hours.
Is it necessary for mortgage lenders to conduct QC Review Prior Clear To Close? The QC underwriting review represents the conclusive step performed by lenders before dispatching mortgage documents and initiating wire transfers to the title company. Not all lenders incorporate a QC review prior clear to close into their processes.
What prompts the need for a QC underwriting review when mortgage underwriting has thoroughly assessed borrowers and granted the clear to close?
In some cases, a QC review prior clear to close may involve a senior underwriting manager endorsing a mortgage underwriter’s file just before the clear to close. On the other hand, certain lenders opt to completely re-underwrite the entire file through a separate underwriting department. The subsequent paragraphs will delve into the details of QC Underwriting Review following mortgage approval but prior to the clear to close.
Throughout my experience in various mortgage companies, I’ve observed that most lenders lack a dedicated QC underwriting review department. When such a department exists, it typically involves a second underwriter reviewing the initial mortgage underwriting to ensure no crucial details were overlooked. On the other hand, some lenders opt for a comprehensive mortgage underwriting process, which might extend beyond a week. We will be discussing the QC review prior clear to close by lenders that do have such a process during their mortgage process:
Depending on the lender, they will do a QC review prior clear to close or right after a clear to close has been issued.
QC review prior clear to close depends on the mortgage lender. Some lenders will do a QC review prior clear to close. Other lenders will issue a clear to close and the QC underwriting review will be done prior to funding.
A clear to close is when a mortgage underwriter has cleared all the conditions from the conditional mortgage loan approval. The underwriter gives the green light to fund the mortgage loan. If the QC underwriting review is done after the clear to close, then if Quality Control finds something wrong with the file with the third party search, the clear to close will be on hold until the issue or issues are cleared up.
Some common issues that are caught during QC review prior clear to close are when public records such as judgments show up by third-party searches where the judgments or other public records did not report on the borrower’s credit report.
There are cases where there is a mortgage loan denial after a clear to close has been issued: This is because Quality Control finds potential fraudulent issues with the mortgage loan application. With the company that I work for, Quality Control takes over after the mortgage underwriter issues a clear to close. Normally most of our clear to close files move on to closing and funding and we have no issues. However, there are some cases where QC may find issues that were either overlooked by the mortgage underwriter or items and factors that were not disclosed by the loan applicant and/or items that were not picked up on the credit report. Let’s look at a case scenario where a clear to close can get revoked.
Suppose a mortgage borrower underwent credit repair, removing derogatory credit items such as collection accounts, charge-off accounts, judgments, tax liens, student loans, bankruptcies, and multiple foreclosures. On the 1003 mortgage application, the applicant indicated NO to questions about filing bankruptcy, having foreclosures, outstanding judgments, and being a party to a lawsuit. This response reflected the successful removal of derogatory items by the credit repair consultant hired by the borrower, and the mortgage originator, processor, and underwriter didn’t find any concerns, as these items were no longer reported on the credit bureaus. The underwriter, making decisions based on the borrower’s income, assets, liabilities, credit scores, and credit history from the credit reports, issued a clear-to-close, seemingly unaffected by the applicant’s affirmative responses on the questionnaire. The key question is whether the QC review occurred before the clear-to-close decision, considering the credit items’ removal through a third-party national public records search.
Before the closing and funding of the mortgage loan, the file undergoes a final review by the Quality Control Underwriting Review Department. This department conducts third-party national searches using vendors like Lexis Nexis and/or Data Verify to perform a national public records search.
If the borrower has multiple bankruptcies, foreclosures, judgments, and tax liens, these will be revealed by the third-party vendor. It’s important to note that public records deleted from the borrower’s credit report still exist in the public records.
Unlike derogatory credit items such as collection accounts and charge-offs, which can be deleted and remain undisclosed to third-party companies, public records like bankruptcies, foreclosures, short sales, judgments, tax liens, child support, alimony, and others persist. Mortgage lenders will discover these records, so it’s advisable to disclose all public records at the start of the mortgage process. The Quality Control Division of the mortgage company will undoubtedly uncover them before closing and funding the mortgage loan.
Again, not all lenders have a separate QC review prior clear to close process. There are instances where the QC review process takes longer than 48 hours and can delay the mortgage closing. Borrowers who are getting the run around with a lender due to their QC Review and cannot get a clear to close can contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at alex@gustancho.com. Gustan Cho Associates has no lender overlays on government and conventional loans and has no QC Review.
This blog about QC Review Prior Clear To Close During Mortgage Process was updated on January 29th, 2024.
Gustan Cho NMLS 873293 is the National Managing Director of NEXA Mortgage, LLC dba as Gustan Cho Associates NMLS 1657322. Gustan Cho and his team of loan officers are licensed in multiple states. Over 75% of the borrowers of Gustan Cho Associates (Gustan Cho Associates) are folks who could not qualify at other lenders due their lender overlays on government and conventional loans. Many mortgage borrowers and real estate professionals do not realize a mortgage company like Gustan Cho Associates exists. We have a national reputation of being a one-stop mortgage company due to not just being a mortgage company with no lender overlays but also offering dozens of non-QM and alternative financing loan programs. Any non-QM mortgage loan program available in the market will be offered by the team at Gustan Cho Associates. Our team of support and licensed personnel is available 7 days a week, evenings, weekends, and holidays.
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if I’m already in a contract with a broker and signed off on docs with the lender but they are not performing timely on my loan, can I switch lenders mid stream?
Gustan Cho, NMLS 873293 says:Yes, you can change lenders during the mortgage process. Please email us with your contact information at gcho@gustancho.com or call us at 262-716-8151 or text us for a faster response. We are available 7 days a week, evenings, weekends, and holidays. Looking forward to working with you and your family.
Mary Leonard says:Federal tax lien was placed on our home which I just found out about. Looking to get a cash out or equity loan to pay down the lien. Current equity in the home is around 250-300k.
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GoodBased on 65 reviewsTrustindex verifies that the original source of the review is Google.Sapna Sharma2024-07-04I am working with Gustan Cho Associates and all the staff and Gus are so cooperatives. Gus is a motivational person and he always motivate or praise about my work. Really so happy working with Gustan Cho Associates Family.Trustindex verifies that the original source of the review is Google.James Strebel2024-04-06Very professionalTrustindex verifies that the original source of the review is Google.Bill Burg2024-04-06Man it’s been great working with Gus and his amazing team. Their professionalism and attention to detail is second to none. I’ve never met anyone with more knowledge and skill at finding ways to help people into a home than him.Trustindex verifies that the original source of the review is Google.Rhonda Smith2024-02-23Amazing placeTrustindex verifies that the original source of the review is Google.brent norkus2024-02-23Working with Gustan and his team has been an absolute pleasure. From start to finish, they have every client's best interest in mind to ensure they get the correct loan that fits their needs. Efficiency and accuracy are two words that describe my experience with Gus. Gus and his team over at Nexa are dominating the GAME! 5 stars is an understatement, and I would give ten stars if possible!Trustindex verifies that the original source of the review is Google.TCrumpCollinsParsonMcGinnis Frazier2024-02-22John and Angie are absolutely amazing! We had another lender and our loan fell through at the last minute. I called John and told him our issues and in 5 minutes he told me he could get it done. After 30 years of praying, moving and bankruptcy issues, these two got it done. It’s was fast and they answered all our questions. There are not enough words that could express how overwhelmed we are and how awesome they are. Do yourself a favor and call John, I promise you will thank me later. Please check out Gustan Cho’s videos. They are telling the truth and will walk thru fire with you. Thank you John and Angie! The Frazier’s.Trustindex verifies that the original source of the review is Google.Charlie G2024-02-16Gus is a great person, and a great loan officer with lots of experience and knowledge of many types of loans. Gus even takes calls after business hours unlike a lot of other companies. Gus has given me the best options available for a mortgage; he is honest and has integrity. I got to give Gus 5 stars due to he goes the extra mile to help you. Thanks Gus.Trustindex verifies that the original source of the review is Google.David Heckman2024-02-15John Strange and Angie Torres made this whole process seamless from start to finish. John would answer a text or call anytime and made sure to keep me updated the whole time. I would tell you that you are in good hands with these two!
Gustan Cho Associates are mortgage brokers licensed in 48 states including Washington DC, Puerto Rico, and the U.S Virgin Islands (Not licensed in NY and MA). The team at Gustan Cho Associates has a national reputation of being able to do mortgage loans other mortgage companies cannot do. Gustan Cho Associates dba of NEXA Mortgage has a lending partnerships with over 190 wholesale mortgage lenders with dozens of no overlay lending partners on government and conventional loans and countless non-QM and alternative lending partners. Over 80% of our clients are borrowers who could not qualify at other mortgage companies either due to a last-minute mortgage loan denial due to lender overlays or because the lender did not have the mortgage loan program suited for the borrower. At Gustan Cho Associates, we only market mortgage loan products that exists and are possible.
