Mortgage Loan Origination Activities: Intake Through Closing
From intake to funding
Origination begins with a complete application and ends with a funded, recorded loan. Intake captures borrower identity, income, assets, liabilities, property, and loan purpose on the Uniform Residential Loan Application. A prequalification is an informal estimate; a preapproval is a conditional commitment subject to verification. Qualification compares income, DTI, LTV, credit, reserves, and program limits. Processing orders title, appraisal, flood determination, verifications, and insurance; underwriting applies investor and program guidelines; closing prepares the Closing Disclosure, settlement statement, note, deed of trust, and affidavits.
Federal timing matters. The Loan Estimate generally must be delivered or placed in mail within three business days after application and received at least seven business days before consummation. The Closing Disclosure generally must be received at least three business days before consummation. A valid changed circumstance may permit revised disclosures; wanting a better price later is not a changed circumstance. The appraisal must be independent, and the borrower generally receives a copy.
Traps: "Application" has different meanings under Reg B and TRID. A purchase-money loan does not have a TILA right of rescission; a refinance generally does. Closing is not funding, and funding is not recording. A preapproval is not a clear-to-close.
Worked example: Borrower submits the six TRID application items Monday; the creditor must provide the Loan Estimate by Thursday, assuming business days. If the borrower then changes the loan amount, evaluate whether a valid changed circumstance supports a revised estimate and re-disclose. Rule of thumb: document, disclose, verify, approve, close, fund, record.