INTRODUCTION When it comes to referring your valued clients to a mortgage lender, we know you have choices. At Randolph Savings Bank we strive to establish your confidence in us, build long term relationships, and earn referrals to your client s family and friends. A great mortgage experience requires precise coordination of tasks, activities, documentation and communication. Activities and tasks need to follow a specific sequence in order to achieve the milestones that move your client s application from the initial consult all the way to the closing of their loan and your transaction. Each of the key participants involved has their own role and responsibility to keep the mortgage process on track. This document was created to showcase our design for delivering the ideal mortgage experience in a post-trid environment. We call it PRIME: Providing Randolph s Ideal Mortgage Experience. This PRIME document maps out our process and is designed to: Define the sequence and timing of the key tasks that have to take place in order to close a purchase in 30 days Define the roles and responsibilities of all the key players in the transaction including the buyer, the seller, the agents, the appraiser, the lender and the attorney Set documentation expectations for buyers, agents and attorneys Establish a time line that makes a 30 day close possible- and assign accountability for achieving milestones Utilize critical tools to shorten the process and save time- including e-consent, electronic delivery of disclosures, electronic document exchange and online status notifications It s our goal to show you, our referral partner, how Providing Randolph s Ideal Mortgage Experience will deliver industry-leading service levels. In order to close your transaction in 30 days, we ve mapped out the time line, steps and activities that will need to take place. Check out our 7 Steps to Home Ownership overview page, then dive in to our guide to Randolph s ideal mortgage experience. We don t want you to be merely satisfied we want to provide you with an experience that will make you a fan of Randolph Savings Bank for life. By setting your expectations, guiding you and your client through this experience, and delivering on our commitments, we hope to earn your trust for years to come. 1
Step 1: Consultation and Pre-Qualification We ll meet with our mutual clients to review their full financial picture to determine the type of financing that will be available to them. The complete pre-qualification will include full analysis of credit, income and assets. Automated underwriting will be performed with a To Be Determined address and all Mortgage Insurance (MI) options will be reviewed. Once pre-qualified, you will be assured that your client will know how much they can afford, the type of home they should look for, and the size of down payment they will need. Step 2: Time to find a home Now is your time to shine! At this point in the process, it s time for you to do what you do best - find a home for the client! With a thoroughly reviewed pre-qualification in hand, you ll know exactly the type of home to look for in a well-defined price range. A pre-qualification from a well-known local lender, allows you to present credible offers and negotiate a purchase and sales agreement. With our customized PRIME Time Calculator, you will know exactly which milestone dates to include in the purchase and sales agreement. Step 3: Completing the Application and Loan Disclosures With a signed purchase and sales agreement, the mortgage process truly begins! This means that it s time to finalize the loan application. The borrower will submit all outstanding documents, and we will send out the borrower s disclosures and Loan Estimate. Step 4: It s processing time! Onward to the processing department! The Randolph Savings Bank processor will order the appraisal and title search while the borrower shops for home owners insurance. While we wait for the appraisal and title to be returned, the processor will complete the tasks and verifications needed to get the file to underwriting. Step 5: Underwriting and Loan Approval When processing is complete, the application will be reviewed to ensure the loan meets the bank s guidelines and that all regulatory requirements are met. A conditional commitment will be issued and we will work with you and our client to clear any conditions. We re almost there! Step 6: Pre-closing, Scheduling and the Closing Disclosure The loan has been approved and we re cleared to close! It s time to schedule that closing appointment. Once the closing appointment has been a scheduled, a Closing Disclosure will be sent. It must be received 3 days prior to the closing date. Step 7: The Closing After finishing all your pre-closing tasks and walk throughs, and making final adjustments to the Closing Disclosure, our mutual client will sign the closing documents and leave the closing with the keys to their new home. It s a great feeling to help someone achieve their dreams of home ownership we bet you re as excited for them as we are! 2
KEY PARTICIPANTS The Client Your buyer, our borrower - the most important participant in this process Real Estate Agent: We re happy to have you on our team for this process! The Loan Originator: Your loan originator is a trusted financial advisor who will guide the borrower through the home buying process. They will review the buyer s credit, assets, and income information to see if the client can be pre-qualified for a mortgage, and then provide mortgage financing options that match the borrower s financial capacity. The loan originator will stay in communication with you and your client through the entire process. Sales Facilitator: Each of our loan originators has a dedicated sales facilitator working with them. This team member is on hand to perfect the application and assist our customer with the online resources we provide. Closing Attorney: The closing attorney represents the Bank and facilitates the closing. In many cases, the closing attorney may also assist the buyer in reviewing or preparing the purchase and sales agreement (P&S). The attorney coordinates the title search and title insurance, and works with the Bank to prepare the closing documents. The attorney handles the disbursement of funds at closing (including commissions) and oversees the execution and recording of the closing documents. Loan Processor: The loan processor s job is to prepare the mortgage loan information and application for presentation to the underwriter. The loan processor will also request missing documents and order services like the appraisal, title and other verifications. They may reach out to you for any number of items, like copies of canceled checks, seller agent contact info, or questions about items on the P&S. Loan Underwriter: The loan underwriter is the professional authorized to review the processed application and make a credit decision. The underwriter ensures that the application meets the bank s guidelines for the specific program our client applied for and ensures that all regulatory requirements are adhered to. The underwriter issues a conditional commitment and ultimately clears the loan application for closing. Real Estate Appraiser: A licensed real estate appraiser s job is to look at the property that is being purchased to determine its market value. Real estate appraisers determine a home s value in a number of ways, including comparing the value of similar homes nearby that have recently sold. 3
STEP 1: CONSULTATION AND PRE-QUALIFICATION The home buying process can be overwhelming for buyers, particularly first time buyers. You can trust that we will take the time to walk them through each and every step of the process, beginning at the initial consultation. We strive to provide guidance, deliver solid advice and set expectations about the entire process. CONSULTATION During the first meeting whether over the phone or in person we will meet with your client to discuss their homeownership goals. We may direct them to our online mortgage loan application before the initial meeting. When they fill out that application ahead of time, they provide us with the context to allow us to present them with more refined information during the initial consult. We ll be able to show them clear data about estimated closing costs, down payments, interest rates and terms to consider. Gathering Documentation During our first meeting, we ll ask the buyer to provide detailed information about their finances and their borrowing needs. Detailing their entire financial condition allows us to assess and deliver an ideal solution that meets their goals. Getting accurate and complete information up front helps to reduce surprises later in the process! The amount of information required for a mortgage can seem overwhelming and even frustrating. We do our very best to set expectations and gather all relevant documents up front. Sometimes we uncover information that drives a need for additional documentation. Best Practice At Randolph Savings Bank, we believe using technology effectively can make the mortgage process much easier. Our online application, e-signature tool, and our web center are designed to quickly, safely, and easily exchange information and documentation, as well as keep buyers informed about their application status. With the buyer s authorization, we can keep you informed as well. Our online status tool can give all parties up to date information on loan status. Check out our Mortgage Web Center at randolphsavings.com/mortgage We encourage borrowers to use these tools as this secure system is the fastest and easiest way to deliver information. But don t worry, we still believe in personal interaction! We re happy to answer questions personally, and are available for in person appointments as well. Call toll free at 877.963.2100 PRE-QUALIFICATION The complete pre-qualification will include full analysis of credit, income and assets. Automated underwriting will be performed with a To Be Determined address and all Mortgage Insurance (MI) options will be reviewed. Once pre-qualified be assured that your client will know how much they can afford, the type of home they should look for and the size of down payment they will need. 4
MORTGAGE INSURANCE The size and source of the down payment is one of the critical determining factors in deciding which loan program is right for your client. Why? If the down payment is less than 20% of the purchase price, they ll likely have to pay for some type of mortgage insurance. Mortgage insurance protects the lender in the event that the borrower doesn t make their mortgage payments and the lender needs to foreclose. Lower down payments translate to a greater risk to the lender, and as a result, they require insurance to protect their investment. Mortgage insurance can be paid in monthly installments, in lump premiums up front, or a combination of the two. Best Practice As a capable Real Estate Agent, you know the importance of your borrower getting pre-qualified before they start looking at homes. You want to be sure that you re showing you the right type of home and that, when the time comes, they are prepared to make a qualified offer. When you re ready to present that offer, you ll be able to do so with confidence. Pre-qualification lets the seller know that the buyer is working with a credible lending institution. A prequalification from a well-known local lender provides additional comfort to a seller. Mortgage Insurance Programs As we work together, we will let you know the type of mortgage insurance the client is qualified for so you can show them the right types of homes. Some properties are not eligible for every type of financing. For example, you may find that some condos are eligible for FHA financing while others aren t. Randolph Savings Bank is fully delegated to underwrite and approve all the mortgage products we offer, locally, inhouse and with our own staff. Not all lenders operate that way. Be sure to ask a lender if they are fully delegated to underwrite and approve the type of mortgage insurance your transactions need. Some lenders may offer certain products, but outsource the underwriting, and that can lead to trouble. If you find that they won t be the ones to approve the loan, you may wish to recommend a lender who is indeed delegated to approve all of the products they offer. 5
STEP 2: TIME TO FIND A HOME With a pre-qualification in hand, you can do what you do best, find that client a home! COOL TOOL Mortgage Coach : If you want specific data about any of the homes you ll be showing, we can help you! We use Mortgage Coach, a robust demonstration tool that s accessible online, by e-mail or text, or via mobile app. It can be customized for your client s needs and will allow you to review not just loan options, but what monthly payments might look like, what closing costs could be, and how much cash will need to brought to close. We can provide data for homes before you look at them or we can send you updates live as you re walking through a home! PURCHASE AND SALE INSPECTIONS With an accepted offer, you will be a key party in the preparation of the purchase and sales agreement. RESPA- TILA Integrated Disclosure rules have had a dramatic impact on the real estate transaction. Some important implications surround the purchase and sales agreement. The new rules require that all costs associated with a transaction be disclosed. If there are atypical buyer charges or unique arrangements on the P&S, it is important that you point those out to us right away. This could include buyer paid transfer taxes when it is not typical for the area or unusual inspections or buyer paid repairs. Best Practice We recommend your buyer retain an attorney to review the purchase and sales agreement before it is signed. We work with a number of real estate attorneys who will be happy to help you as part of their closing services. The purchase and sales agreement is a legally binding document and deposit money could be at risk having an attorney involved in the writing of the purchase and sales agreement offers important additional protection. At Randolph Savings Bank, we pride ourselves on PRIME, our streamlined 30-day process and we re excited to work with you to close your deal on time, even with TRID. Events need to happen sequentially with an eye on time in order to achieve your target closing date. We have prepared a date calculator that clearly defines the minimum amount of time needed to complete each milestone in the mortgage process. We are happy to review those dates with you and make sure everyone understands their responsibility in meeting that time line. The Home Inspection and Its Place in the Process We always recommend that a buyer get a home inspection. As you know, an inspection can lead to some additional negotiation between the buyer and seller and that can take time. So, we start our 30 day time line once the P&S is signed and inspections are complete. 6
STEP 3: COMPLETING THE APPLICATION AND LOAN DISCLOSURES You have a signed purchase and sales agreement and inspections are complete now our work towards processing and approving the mortgage application begins! The clock officially starts now: we are underway! It is Day 1. With PRIME, It s our goal to close each transaction in 30 days and keep everyone informed on where we stand. We use a variety of methods to do so, including e-mail, online status notifications and good old fashioned phone calls. Based on customer information privacy rules, there are certain borrower specific communications that we will not include you on. Other communication requires the borrower s permission to allow us to share with you. Starting now, we ll be tracking the activities and tasks that need to take place for us to remain on schedule. Your first task as the Real Estate Agent? Deliver a signed P&S, and copies of any deposit checks that have been received. DAY 1 MEET THE TEAM All involved parties will receive a meet the team e-mail identifying the members of the RSB team that will be working on the transaction. DAY 2-3 DISCLOSURES During the pre-qualification process, we reviewed the program options available to the borrower. Now that we know the price of the home, we ll finalize the loan application and provide the Loan Estimate and other disclosures. NOTE! In order for us to begin working on the file, we need these signed disclosures back. Remember, these documents are not binding and they are not the final loan documents but they do provide, the intent to proceed which verifies we can start processing the loan. These documents will be delivered either securely through our online web portal, in person, or by mail. These documents must be delivered to the borrower no later than Day 3, though we try to deliver them by Day 2 DAYS 3 5 REFRESHED DOCUMENTS As part of the pre-qualification process, we likely will have most of the documentation for verifying income and assets. Depending on the timing, some of that documentation may need to be updated or refreshed. We will give the borrower a list of documentation that is still outstanding. In order to stay on track with our schedule, we will need all of the information to the loan originator or processor no later than day 5. NOTE! One of the common frustrations that a buyer has is the amount of documentation that is required. We do our very best to prepare everyone for this important part of the process. Without all of the information and documentation, and the signed disclosures, we can t put PRIME to work. The key to the 30 day process is getting all the information we need in on schedule. By providing us with all of the information we need upfront, in one complete submission, we are able to issue a quick and clean loan approval. 7
STEP 4: IT S PROCESSING TIME! DAYS 5 & 6 With the completed application, a signed purchase and sales agreement, signed disclosures and updated documentation in hand, the processor will order the appraisal and title search, other services from third parties and begin the processing and verifying the information in the application. APPRAISAL The appraisal will be ordered by Randolph Savings Bank. Typically the appraisal is scheduled with the seller s agent. As long as permission from the borrower has been received you will receive notifications that the appraisal has been ordered and scheduled. TITLE SEARCH The Bank s closing attorney will coordinate a title search on the subject property. Our Attorneys understand our 30 day process and the implications of TRID. The Bank has an extensive list of approved attorneys that represent the bank and very often also represent the buyer. The search will determine relevant interests in and identify regulations concerning that property. In the case of a prospective purchase, a title search is performed primarily to answer three questions regarding a property on the market: Does the seller have a saleable interest in the property? What kind of restrictions or allowances pertain to the use of the land? These would include real covenants, easements and other equitable servitudes. Do any liens exist on the property that need to be paid off at closing? These could include mortgages, back taxes, mechanic s liens, and other assessments. The title search will be ordered as soon as we receive the submission, ideally Day 5. HOMEOWNERS INSURANCE While the loan is being processed, the buyer should be shopping for a homeowners Insurance policy. Your role? They may need specific property information from the listing in order to get an accurate quote. 8
STEP 5: UNDERWRITING AND LOAN APPROVAL DAYS 14 18 UNDERWRITING If all documents have been received on time, processing will be complete by the time the appraisal is received. The loan will then be submitted to our underwriting team for a loan decision. The underwriter will issue a loan decision based on the bank s guidelines for the specific program applied for and ensure that all regulatory requirements are adhered to. If guidelines and requirements are met, the underwriter will issue a conditional loan commitment prior to the mortgage commitment date, ideally by Day 18 on the time line. The conditional loan commitment outlines the terms and conditions under which the bank will lend a borrower money to buy the home. Our goal is to make this conditional loan commitment as clean as possible with few conditions. DAYS 18 21 GATHER FINAL CONDITIONS We will work with the buyer to gather the final conditions on the loan. These conditions usually include updated statements or documents that were not available earlier in the processing time line. Once the final documents have been received, the processor will send the file back to the underwriter for the final approval where the loan is cleared to close. We are almost home! An insurance binder needs to be provided to us by the customer s agent 10 days prior to the closing date. Our loss payee clause should read: RANDOLPH SAVINGS BANK, ISAOA ATIMA 10 CABOT PLACE STOUGHTON, MA 02072 9
STEP 6: PRE-CLOSING, SCHEDULING AND THE CLOSING DISCLOSURE DAY 22 CLEARED TO CLOSE The loan has been approved and we are cleared to close! The attorney will work with you, the buyer and the seller s team to confirm the date of the closing and gather some important final information in order to facilitate the closing of the transaction. Because of important federal regulation, abiding by the time line is more important than ever. DAY 24 CLOSING DISCLOSURE The Closing Disclosure needs to be prepared and sent to our customer seven days prior to closing so the buyer has time to review the Closing Disclosure. The Closing Disclosure is a statement of final loan terms and closing costs. The borrower will compare this Closing Disclosure document with the Loan Estimate. By law, many of the fees disclosed in the Loan Estimate cannot change, so there should be very few surprises in the Closing Disclosure. The Closing Disclosure also includes the breakdown of the real estate commissions. Federal regulations require that we confirm that a borrower has received the Closing Disclosure three days prior to the actual closing. If we use regular mail, the disclosure has to be sent six days prior to close. We can send the disclosure to a borrower electronically, however, they will need to consent to receiving the documents in this manner. Even if the buyer opts to e-sign the Closing Disclosure, it has to be received three days prior to closing, with no exception. For this reason, in instances where we have a very clean conditional commitment, we may send the Closing Disclosure before the loan is cleared to close. It s our goal to close each transaction on time! Material changes to the Closing Disclosure may require a new three day waiting period. Keeping us posted on any unusual fees that may impact the Closing Disclosure is the key to avoiding those delays. DAY 24-30 YOU ARE FRONT AND CENTER AGAIN There are some important final steps that have to take place prior to the closing and these activities are typically coordinated by the Real Estate Agents: Final water and utility readings Smoke detector certification Final walk through/inspection of the property DAY 27 FUNDS NEEDED TO CLOSE As described above, the Closing Disclosure is a statement of the final loan terms and the costs to complete the loan transaction. The Closing Disclosure will detail all of the settlement charges and document the balance of buyer s funds to be brought to closing. The Bank s attorney handles all of the final disbursements to complete the transaction. Because all of the funds need to clear the day of the closing, they will require that the buyer bring a certified bank check to the closing to cover the balance due. 10
STEP 7: THE CLOSING DAY 30 The journey to home ownership ends at the settlement, or closing. Because of the hard work that you and our professional team have done together, the closing should be a happy event, free of stress or anxiety for our mutual client. The closing is coordinated by the Bank s closing attorney. The closing attorney schedules the closing, controls the disbursement of funds, facilitates the execution of the closing documents and ensures the documents are recorded in the local municipality. The Specifics of Closing 1. The Bank transfers the loan proceeds to the closing attorney. The closing attorney will combine the funds the borrower brings to the closing with the loan proceeds to ensure that all liens on the property are paid off. Then any additional proceeds are disbursed to the seller. The attorney also ensures that real estate commissions are paid. 2. The seller signs a deed transferring ownership of the property to the buyer. 3. The borrower will sign a number of important closing documents for the Bank, the most important of which are the note and the mortgage. 4. The closing attorney records the deed and the mortgage ensuring that the buyer now owns the property and the Bank s mortgage is secured. 5. The buyer leaves the closing with the keys to their new home! 6. You will leave with a commission, a satisfied client and a great professional partner in Randolph Savings Bank. 11