Step Seven – Miscellaneous
When I have taught classes on the 10 point process of underwriting the question always comes up,
“why do you have a miscellaneous step?” The answer is actually very simple, this step is placeholder to put all the questions, documents, and items in the file you have found during steps one through six that you might have NO clue what they are or just don’t fit in the steps.
Examples of what I put in the miscellaneous box
- HUD -1’s from homes have recently sold but show no record on the 1003 or SCH E!
- Letter of explanations that seem to explain things that I did not see in the documents
- Notes from the loan officers or processors asking about something related to the file that I really don’t know how to answer until I have completed the file
- Weird one off procedures like “solar panel leases” that I know I need to review but require “extra” step to complete the requirements before I approve the loan
- Reviewing property documents for the borrower’s additional properties to get the REO section on point and accurate”
Bottom line, step seven is just here to give you space to think if you need to. Many times I have put items in this step and found out after reviewing the other steps that the document or question I “parked” her was answered in one of the previous steps.