What are Checklists?
Checklists are preconfigured sets of conditions that automatically verify whether certain criteria are met based on the data in the loan. They are used to ensure compliance with necessary checks, such as a Clear to Close (CTC) checklist. Items that do not meet the criteria can be manually signed off or overridden by a person with the appropriate permissions. Checklists can also drive workflow by triggering Loan Actions or Automated Actions when the entire checklist is completed. Additionally, Checklists are automatically rerun and reevaluated as loan data changes, ensuring that all conditions are continuously met throughout the loan process. Checklists can also be generated as a document and automatically placed in the loan file.
Core Features of Checklists:
Automated Verification:
Checklists automatically check if specific conditions are true based on the loan data. This ensures that all necessary criteria are evaluated consistently and accurately.
Dynamic Reevaluation:
Checklists are automatically rerun and reevaluated as loan data changes, ensuring that all conditions are continuously monitored and updated in real time.
Manual Override:
Items in the checklist that do not meet the criteria can be manually signed off or overridden by a person with the required permissions. This allows for flexibility in handling exceptions and ensures that the loan process can proceed when necessary.
Workflow Integration:
Checklists can be integrated with workflow automation tools to trigger Loan Actions or Automated Actions when an entire checklist becomes true. This helps streamline the loan process and ensures that subsequent steps are taken promptly.
Document Generation:
Checklists can be generated as a document and automatically placed in the loan file, ensuring proper documentation and compliance.
Examples of Checklists:
Clear to Close (CTC) Checklist:
A CTC checklist might include conditions such as verifying all documents are received, ensuring all underwriting conditions are met, and confirming that the appraisal has been completed. Once all items are true, the loan can proceed to closing.
Pre-Approval Checklist:
This checklist could include verifying borrower income, checking credit scores, and ensuring that all required documentation is submitted. It helps ensure that all necessary conditions are met before a loan can be pre-approved.
Compliance Checklist:
A compliance checklist might include ensuring that all disclosures have been provided to the borrower, verifying that all regulatory requirements are met, and confirming that all necessary forms are signed.
QM Compliance Check:
This checklist ensures that the loan meets the Qualified Mortgage (QM) standards, such as verifying that the borrower’s debt-to-income ratio is within acceptable limits and ensuring that no risky loan features are present.
Benefits of Using Checklists:
Consistency:
Automated checklists ensure that all conditions are evaluated consistently, reducing the risk of errors and omissions.
Efficiency:
By automating the verification process, checklists save time and effort for users, allowing them to focus on more critical tasks.
Accountability:
The ability to manually sign off or override checklist items ensures accountability and provides a clear audit trail of who approved each condition.
Workflow Optimization:
Integration with Loan Actions and Automated Actions ensures that the loan process is streamlined and that subsequent steps are taken promptly once all checklist conditions are met.
Continuous Monitoring:
The dynamic reevaluation of checklists as loan data changes ensures continuous compliance and monitoring throughout the loan process.
Documentation:
Generating checklists as documents and automatically placing them in the loan file ensures proper documentation and compliance.
Conclusion:
Checklists are an essential feature within Lender’s workflow automation toolkit. By automatically verifying specific conditions based on loan data, checklists ensure consistency and accuracy in the loan process. The ability to manually override items, integrate checklists with workflow automation tools, dynamically reevaluate conditions, and generate checklist documents enhances flexibility, accountability, and efficiency. This makes checklists a vital tool for optimizing loan origination and processing.