Explaining the Role of a Loan Processor to Borrowers

Very few borrowers will walk into your office knowing much (if anything) about this ultra-important part of their homebuying team.

As a mortgage professional, you’ve probably observed today’s shockingly low levels of financial literacy first-hand. As it stands, only 57% of Americans are considered financially literate.

How many, then, would you guess understand the role of a niche mortgage professional like a mortgage loan processor? Would “next-to-none” be a fair answer?

The good news is that you hold the keys to positive change. Borrowers trust you to impart knowledge, steer them in the right direction, and ultimately tell them what they need to know.

So, by simply taking the time to explain the job of this ultra-important part of their homebuying team, you can promote borrower education, grow their understanding, and even establish yourself as a caring, knowledgeable mortgage pro.

Ready to get started? Here’s what to keep in mind when it comes to this critical conversation:

Explaining the Role of a Homebuying Team

To start, you’ll want to add some context to the role of a loan processor. Start with an overview of their entire homebuying team, so they can clearly see where the processor fits in.

Here’s a sample script you might use:

“A home is one of the biggest purchases you’ll ever make, and no one goes through the process entirely alone. Most buyers enlist the help of a home buying team.

This might include:

• Your real estate agent. They’ll help you find the right home, negotiate an offer, and hopefully get to closing.
• Your home inspector. They’ll take a close look at the home you’re interested in to ensure it’s in good shape or identify any potential problems.
• Your mortgage professional (that’s me!). I’ll help you find the right loan program for your personal situation.
• Your loan processor. They’ll help collect your application materials, like employment records, pay stubs, credit reports, and more.
• Your loan underwriter. They’ll evaluate the materials the loan processor provides and determine your creditworthiness for the loan you’re seeking.

Today, let’s take a closer look at the responsibilities of your loan processor. They play a critical role in your home loan journey because they help collect the documentation needed for your loan underwriter to make a decision to hopefully approve your loan.” 

Explaining the Role of a Loan Processor

Now, you’ll want to dive into the responsibilities of a loan processor, specifically.

It might aid in understanding to add personal anecdotes related to processors you’ve worked with in the past, but either way, be sure to cover a few main points:

• There are lots of documents and files associated with a mortgage application. That’s where the processor comes in.
• Their goal is to gather application materials quickly and efficiently, so the borrower’s process is that much smoother.
• The borrower doesn’t need to find their own loan processor, as you (like many other mortgage professionals) probably already have your go-to loan processor.

A handout or follow-up email reiterating these points can really help drive the lesson home. It also serves as a physical copy that borrowers can refer back to whenever they’d like a refresher.

Checking for Understanding and Answering Questions

Once you’ve explained the function of the homebuying team as well as the role of a loan processor specifically, you may want to check for understanding and pause for any questions.

Some say that you don’t entirely understand a concept until you can explain it to someone else, so you might even consider asking some guiding questions.

Rephrase concepts you covered previously into questions, to gauge their understanding. Be sure to also give them the floor for questions. If there’s an especially good one that you’ve never heard of before, write it down. You should incorporate it into your explanation for future clients!

Wrapping Up: Explaining the Role of a Loan Processor to Borrowers

Your borrowers probably have a grasp on the role of their real estate agent. They might even have some idea of what you do. But their loan processor? Odds are they’re essentially clueless.

The processor is a critical part of the homeownership journey, though. That’s where you come in.

By simply providing some context, explaining the role, checking for understanding, and answering a few questions, you can help improve this country’s low levels of financial literacy. And who knows, you might even earn a five-star review in the process.

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