Once the loan has been underwritten the bank sends us one of three decisions.
- Loan approval with conditions or stipulations.
- Loan suspense
- Loan denial
With the loan approval with conditions or stipulations the bank send us the approval letter with a detailed list of what they need to finish the loan out. They are frequently referred to as stips, stipulations to finish the loan. Once we get the approval the client is then emailed with a detailed list of the stips and what we need to exactly satisfy the banking guideline that created the stip or loan condition. Note that during this process sometimes the information you give us to clear the loan can have additional information tied to it that makes the underwriter ask for further documentation. So even though you provided the information that doesn’t necessarily mean you are done. They could ask for additional information to help clear it out the remaining conditions and finalize your loan.
Loan suspense means they have reviewed the documentation presented and they have not approved your loan nor have they declined it. It means they want more documentation to get a clearer picture to render a decision on the loan.
Loan denial is where they just turn down the loan. The underwriters have reviewed your scenario and are either uncomfortable with the loan or it has certain characteristics that don’t meet the banking guidelines in general. Even if the loan meets all the federal banking guidelines, that doesn’t necessarily mean the bank will take the loan. It is the underwriters job to view each loan scenario and scrutinize whether they feel like you will pay back the money. They are protecting the bank’s interest. Foreclosure is an expensive money losing proposition for the banks.