Understanding Mortgage Disclosures from Start to Finish

If you’re a real estate agent or a buyer who’s ever thought, “Why is this taking so long?” - this blog is for you.

My team and I work closely with buyers every day, and part of my job is not just getting them the best loan; it’s also managing the timing and sequence of events that most people never see. Real estate agents are on the front lines with clients and timelines, so understanding the disclosure process can help avoid frustration and keep deals moving smoothly.

Let me walk you through what happens behind the scenes, from initial disclosures to the closing table, and how we manage every step along the way.

Step 1: Intent to Proceed & Loan Estimate   - Kicking Off the Loan Process

Once a borrower completes their application and gives us the green light to move forward, we send the Intent to Proceed & Loan Estimate (LE) - the first official disclosure - within three business days. In most cases, we complete the application the same day the offer is accepted.

Additional disclosures at this stage include:

• E-sign consent forms
• Borrower authorization forms
• Anti-steering forms (for brokers)
• Other required Federal/State documents

What’s included in the LE:

• Estimated interest rate
• Monthly payments
• Closing costs (if this is a purchase, we'll need fees from Escrow and Title)
• Loan terms

Agent Tip: This doesn't mean the borrower is “locked” or approved - it just means we've started the process and given them a clear picture of what the loan could look like.

Once the borrower reviews and signs the LE and the Intent to Proceed, we're able to move forward with collecting documents, ordering services (like the appraisal), and submitting the loan file to underwriting.

Step 3: Appraisal Ordering

Once disclosures are acknowledged, we’re finally allowed to order the appraisal. Contrary to what many believe, we cannot order it before disclosures are acknowledged. This is a federal requirement (TRID) to protect consumers from being pressured into fees before understanding their loan terms. Agents or Lenders can pay for the appraisal before the disclosures are signed, but we get disclosures out quickly and let the buyer pay for it when they are ready!

Appraisal turn times vary but often take 5 - 10 days, depending on market, location, appraiser availability, and sometimes degree of difficulty.

Agent Tip: If you’re tight on timelines, knowing this sequence helps. The faster a borrower acknowledges disclosures, the faster we can move forward. Sometimes buyers stall on paying for their appraisal as they are reviewing their inspection or negotiating repairs. That does not mean that we did not order the appraisal, but it does mean that your deal could be in jeopardy!

Step 4: Processing & Conditional Approval

Now that disclosures are signed and the appraisal is ordered, the file heads to processing and then underwriting. We’ll get conditional approval, which comes with a list of items (conditions) we still need, like:

• Updated paystubs or bank statements
• Verification of employment
• Signed letters of explanation
• Appraisal report
• Sourcing an earnest money deposit on purchases
• Insurance
• Vesting, etc

Note – An Underwriter pulls a few extra things when a file is underwritten and these things can bring up some additional questions:

• Fraud Detection Tools: DU includes a fraud detection component that cross-checks data against internal and external databases (e.g., LexisNexis, CoreLogic) for inconsistencies in identity, address history, or Social Security number. This flags potential identity theft or misrepresentation.
• LDP (Limited Denial of Participation) Check: For FHA loans, the underwriter verifies through the FHA Connection portal that the borrower and transaction parties are not on HUD’s LDP list, which bars individuals from HUD programs due to fraud or noncompliance.
• GSA Excluded Parties List: Fannie Mae requires a check against the General Services Administration’s list to ensure no parties (borrower, appraiser, etc.) are excluded from federal programs, reducing fraud risk.
• OFAC (Office of Foreign Assets Control) Check: Underwriters screen against the U.S. Treasury’s OFAC list to identify individuals or entities subject to sanctions, ensuring compliance with anti-terrorism and anti-money laundering laws.
• Identity and Employment Verification: While not a traditional background check, DU prompts for validation of Social Security number, employment history, and income documents (e.g., W-2s, pay stubs) against third-party data sources to confirm authenticity.

Step 5: Closing Disclosure (CD)

The Closing Disclosure must go out at least three business days before signing loan docs. The closing disclosure gives the borrower time to review the final numbers.

We can’t send the CD until:

• The loan is conditionally approved
• All fees are verified
• We will need insurance, which has been a cause of delay over the past couple of years!

Agent Tip: This is not the same as signing loan docs - this is the start of the final countdown.

Final Step: Clear to Close & Signing

Once all final conditions are in, the file is cleared to close, loan documents are drawn, and we schedule signing. Funding usually happens 1 - 2 days later, depending on the type of loan and the scheduled close of escrow date.

Final Thoughts for Real Estate Agents:

• If you ever feel like “nothing’s happening,” chances are we’re just working through this sequence.
• The faster your client and third-party vendors move, the faster we move.
• Agents who understand this process can guide clients more confidently and keep things calm when timelines get tight.

This isn’t just paperwork - it’s a federally regulated process with strict timelines. And while it’s invisible to most, it’s everything to making the deal happen.

Please let me know if you have any questions or if a client needs my guidance. I’m just a call, text, or email away.

📞 Cell: 661-714-6258

📞 Direct Line: 661-291-2222

📞 Office: 661-260-2970 ext. 2222

📧 Email: Mike@AugustaFinancial.com

But wait, there’s more…

Interest Rates

Interest rates had the best day we have seen in quite a while! We are now back to the July 9th lows. Yup 20-day lows! LOL!

Loan Programs

• We do loans on Non-warrantable condos!
• We offer 12-day escrows for pre-approved buyers, including conventional FHA/Jumbo/Bridge loans.
• We provide loans in all 50 states, so call me with anything you need.
• Government loans (FHA/VA/USDA) are in the high 5’s and low 6’s.
• Conventional loans up to $806,500 are in the low to mid 6s.
• High-balance loans from $806,501 to $1,209,750 are also in the 6’s and 7’s.
• Jumbo loans above $1,209,750 are in the 6’s and 7’s.
• Bank statement loans are available with 10% down again, with larger down payments in the 6’s++.
• Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement!
• 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000.
• Private Money lenders offer Hard Money Loans with 35% down.
• No-Ratio Loans require a 30% down payment.
• DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down.
• Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go!
• 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates!

Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits.

**Good News for Condos:**   

Canyon Village HOA – I am being told that they have fixed what was broken, and two loans are supposedly closing in there! This is not confirmed, but this is what we are being told!

**Bad News for Condos***

Apple Park – On Apple in Newhall! On the naughty list! Deferred maintenance – BALCONIES!

BIG NOTE –

We are starting to see condos with over 15% delinquency, indicating that people are struggling to pay all their bills. Stay tuned for more enlightening BS from me! LOL!

The full state of California’s naughty list has been added to: MikeMeena.com! See the link below:

https://mikemeena.com/non-warrantable-condos/

Let me know if you hear anything new about condos or townhouses.

I am available every day if you need anything.

📞 Cell: 661-714-6258

TEXT: 661-714-6258

📞 Office: 661-260-2970 ext. 2222

📞 Direct Line: 661-291-2222

📧 Email: Mike@AugustaFinancial.com

Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow!