Pulling Credit

 One of the tasks of a Loan Specialist is to pull credit, which I will dive into in this post.  Pulling someone's credit gives you an entire look as to how well they repay their loans, whether they be credit cards, auto loans, student loans, mortgages, or other types of loans.  Anytime you have to give your social security number and you receive money, goods (home or automobile, generally) or a service, you get a loan put on your credit profile.  I'm going to talk about what a loan specialist should look out for, some helpful tips, and anything else I've learned from my experience being a loan specialist.

Before pulling a client's credit, you should have their expressed written/electronic or verbal consent before doing so.  Just because they fill out an application and provide their SSN does not mean they consent to the broker/lender pulling their credit.  Some loan application servers and portals ask the borrower automatically if they consent to the broker pulling their credit, which when they do, generates a mini document stating they consent to a credit check.  That alone is good enough as proof that the borrower gave their consent, so long as there is one for each borrower on the loan.  

When pulling a client's credit, their basic information must be entered into the credit agency's system.  Different credit agencies will require different information, but all should require the client's legal first and last name, social security number, and date of birth.  Some will also require the client's address history, like the one we use.  Some may also require the subject property's address.  All of this information should be entered accurately and carefully, especially the spelling of the client's name and the entry of their SSN.  

In today's modern age, the credit pull should not take long.  At our agency, it takes ten seconds, give or take a few seconds.  The credit results should then appear.  Mortgage lenders use three credit bureaus to see a client's credit profile: Transunion, Experian, and Equifax.  They will each come up with a unique score, but should all find the same debts and loan history on the client's credit profile.  The lender will use the median of the three scores for the borrower's FICO score.  If there are multiple borrowers, they use the lowest of everyone's median scores.  

Something that may happen is a borrower's credit may show up frozen or locked.  Freezing or locking credit helps prevent someone from using your SSN to obtain a new debt.  Depending on the lender and how many of the three scores are frozen, the client may have to unfreeze/unlock some or all of their credit scores.  Some lenders require all three to be unfrozen/unlocked, some require two, and there are even some that require just one.  But all of them require at least one to be unfrozen or unlocked.  The client would then simply have to be reached out to to unfreeze or unlock their credit.  If they locked or froze their own credit, they should know how to unlock or unfreeze it.

A client's list of debts should appear on their credit profile.  Obviously, fewer is generally better, but it's more important to have lower balances than fewer open debts.  But both affect your score.  Any missed payments should also show up.  Generally, missed payments themselves don't disqualify someone from being able to obtain a mortgage loan, unless their primary mortgage (say, the one they're refinancing) had a missed recent payment.  

There are three main types of debts that will show up on someone's credit profile, although they are just the most common.  They are revolving charge accounts, installment loans, and mortgage loans.  Revolving charge accounts are just credit cards that you can zero the balance on, charge a payment to, and keep paying off.  Installment loans are loans that once they get paid off, disappear and no longer have to be repaid, but a record of them will still remain in your credit history.  The most common installment loans are auto and student loans, but you can also obtain loans for most large purchases including other vehicles, furniture, or remodeling.  Auto leases technically are installment loans, but usually get a different designation because they don't disappear off credit once fully paid off--generally, you have to close your account with the leasing auto company.  And of course, there are mortgage loans, any loan acquired from a lender or bank for purchase of real estate or property.  They function a lot like installment loans that just need to get paid off.  

Basically, there's not too much to teach about credit profiles.  It's more something you learn with experience.  It helps to review the lending agencies (Fannie Mae and Freddie Mac) guidelines regarding credit.  Often times, people with solid income histories and people who can get you any document you need tend to have great credit profiles.  

The Loan Specialist Blog

 Welcome to the Loan Specialist blog!  My name is Brian, and I will be blogging about my experiences and knowledge of being a Loan Specialist.  In this first post, I'll delve into what a Loan Specialist is, what they do, and why more brokers should hire for this position.  

So what is a Loan Specialist?  A Loan Specialist is an assistant to a mortgage broker/loan officer who assists them with setting up loan files.  The loan specialist compiles client documents, pulls credit, submits the loan file to the lender, sets up the loan file with accurate information, and determines if the client(s) qualify, generally by running some sort of Automated Underwriting System, or AUS for short.  

Generally, a loan officer does this themselves.  That's why they are sometimes also called loan originators.  But technically, a loan specialist is a loan originator.  Having a loan specialist allows the loan officer(s) to focus more on sales and client relations.  They don't have to do the busy work of assembling the file, documents and pulling credit.  That's where the loan specialist comes in.

One of the biggest aspects to the loan specialist position is assessing and calculating income.  This requires someone with very good attention to detail and someone good with numbers.  Fortunately, there are income calculators available at a lot of lenders, so the math part isn't quite as important.  What is almost more important is knowing what can and cannot work.  For example, someone who was out of work for a few years and is about to start an hourly position likely wouldn't be able to use their income.  

My boss hired for the Loan Specialist position so that, as I said earlier, he and other loan officers could focus more on sales.  This allows them to focus on making quality Bombombs (video emails) and have meetings whenever they need.  Also, hiring someone who only focuses on creating loan files ensures more accurate loans.  If an LO has to create a loan file while simultaneously focusing on sales and meetings, they are far more likely to make an error which could sabotage a deal.  

I'm honestly surprised that the position of Loan Specialist is not more widely known or used.  I'm sure some brokers consider it to be a waste of a position/money, because unless they are constantly getting loan files to work on or can assign them other busy work, it may not be the best use of company money.  But to any loan broker that wants to ensure accuracy of files, I highly recommend they hire for a loan specialist.  Someone who, like me, is good with numbers and can remember rules and guidelines.  

Year by year, jobs gain and drop in popularity based on need in the current economy.  I think the position of loan specialist is going to be a job on the rise.  I think more and more brokers will hire for them.  I know there are a lot of people out there, like me, who aren't the best at communicating with people, but are good at following rules and guidelines and have attention to detail.  So I believe there are people that would be willing and able to fill those positions should more brokers start hiring for them.  I hope anyone that may read this possibly considers it for a position, because it's one that (should) pay well enough and allows someone to work a normal 9-5 with regular weekends and holidays off.