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What does it mean when your loan goes BACK into underwritting?

We are buying a new home, and closing in 7 days. My broker said that my loan was scheduled to come out of underwriting last Thursday and we would know Friday about our approval. Friday I call and he says that it's in quality control and it could be any second or it could be a few hours until they were done, I didn't get another call that day and waited until today, Monday, to call back. They said that everything looks good and we're looking like we're okay to close on time but the loan went back into underwriting. What does this mean? Why would it go back into underwriting if it had already come out? Does this mean we have a greater chance to get denied for the loan?
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January 23 2012 - Houston
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September 26 2013
Nice answer from @Albert (thumbs up from me!!!).  It doesn't sound like you have anything to worry about.  The vast majority of loans go through the final review without a hitch; however, the timing is always agonizing for an agent or borrower.

Understand that everytime a loan goes back to any stage of the process and/or gets "in line" for any stage of the process, it goes to the back of the line.  The average underwriter is probably underwriting or reviewing 20 plus (40 plus???) files in a single day.  When a mortgage professional says the file has gone back to underwriting the tendancy is to think he/she handed it to the underwriter and all answers should be forthcoming in a few minutes.  NOT!  It means the file moved from one desk to another and it "in line" for review.  

As I stated, most of the time it is just a matter of time.  Hiccups happen when the new documentation does not match the original application and/or the appraisal or title work has issues.  In mortgage lending, NO surprise in a good surprise (IMHO).  As long as everything is validated and the supporting documents are reflective of the facts the file was approved upon, there should be no issue.  It is for this reason, that I do NO preapprovals without full documentation.  Best of luck to you!
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January 24 2012
Yes, I agree with everyone.  Usually there are a few conditions the lender has to satisfy before the underwriter gives the final ok.  If you just hang in there a little bit longer, you will probably be ok.  In today's world, the underwriters are really scrutinizing loans so they don't get any back.
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January 23 2012
I would not get discouraged. I agree it is not unusual for underwriter (person who is actually approving the loan and putting his job and reputation on the line for YOU), to give it one final look for completeness and quality of thought. Good luck.
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January 23 2012
To elaborate on Albert's answer, your approval was conditional and your lender met the conditions and sent it back in to underwriting for final approval.  In my experience, it is pretty common to have a loan go back to underwriting, sometimes multiple times.  Good luck!
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January 23 2012

Once you actually apply for a home loan, your mortgage application will be submitted and sent along to a loan underwriter, who will determine if you're a sound borrower.

The underwriter can be your best friend or your worst enemy, so it's important to put your best foot forward.  The expression, "you've only got one chance to make a first impression" comes to mind.

Underwriter Will Approve, Suspend, or Decline Your Mortgage Application

Put simply, the underwriter's job is to approve, suspend, or decline your mortgage application.

If the loan is approved, you'll receive a list of "conditions" which must be met before you receive your loan documents.  So in essence, it's really a conditional loan approval.

If the loan is suspended, you'll need to supply additional information or documentation to move it to approved status.

If the loan is declined, you'll more than likely need to apply elsewhere, with another bank .

The Three C's of Underwriting

That said, you may be wondering how underwriters determine the outcome of your mortgage application?

Well, there are the "three C's of underwriting," otherwise known as credit reputation, capacity, and collateral.

Credit reputation has to do with your credit history, including past forclosures , bankruptcies, judgments, and basically measures your willingness to pay your debts.

I hope this helps,

Albert

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January 23 2012
 
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