What term describes the process of taking and processing a mortgage loan application?

The process of taking and processing a mortgage loan application is known as origination. This term encompasses several steps, including gathering relevant information from the borrower, verifying their eligibility, and evaluating their financial situation to determine how much they can borrow. Throughout the origination process, lenders assess various aspects, such as credit scores, income, and existing debts, to establish the borrower’s ability to repay the loan.

Additionally, origination is the initial phase where the loan officer interacts with the borrower to explain different loan products and help them choose the one that suits their needs best. This ensures that the borrower is well-informed and understands the terms of the loan they are applying for. The origination process sets the foundation for subsequent steps, including underwriting, where the lender evaluates the risk of lending the money.

While other terms like approval, underwriting, and servicing are related to the lifecycle of a mortgage loan, they refer to different aspects of the process. Approval typically refers to the lender’s decision after underwriting has assessed the application. Underwriting is specifically the risk assessment phase that follows origination. Servicing relates to managing the loan after it has been funded, such as collecting payments or managing accounts. Each of these components plays a crucial role in the overall mortgage loan process