The Real Estate Settlement Procedures Act (RESPA) helps consumers by providing clear information about settlement costs and reducing certain fees.
RESPA was signed into law in December 1974 and went into effect on June 20, 1975. It ensures that lenders and mortgage servicers disclose all the costs associated with buying a home, giving buyers a better understanding of their financial responsibilities.
RESPA also prohibits referral fees and kickbacks, making sure that homebuyers are not influenced by hidden incentives. This law aims to create a fair and transparent real estate market, protecting the rights and financial well-being of consumers.
Specialized VA Knowledge
VA loans have unique requirements (COE, residual income, funding fee calculations, appraisal requirements).
A contract processor experienced in VA loans can spot potential issues early and streamline the process.
Cost Savings for Lenders
No need to hire full-time staff; processors are paid per file.
Helps smaller brokerages or lenders manage fluctuating loan volumes without carrying extra payroll.
Faster Turn Times
Contract processors often work remotely and are paid per closed file, so they’re incentivized to move loans quickly.
They can push COE requests, follow up on VA appraisals, and ensure VA-specific forms (26-1880, 26-8923) are completed on time.
Compliance & Accuracy
VA has strict guidelines (e.g., allowable fees, seller concessions, and veteran protections).
A skilled processor reduces risk of compliance errors that could lead to loan buybacks or funding delays.
Scalability
During high volume seasons (e.g., rate drops, PCS military moves), lenders can bring on extra processors quickly without long-term HR commitments.
Reduced Loan Officer Burden
Lets LOs focus on originating, networking, and serving clients while the processor handles gathering DD-214s, income docs, pest inspection reports (if required), and underwriting conditions.
Improved Borrower Experience
Veterans and active-duty borrowers often value clear communication and speed.
A processor who knows the VA process can anticipate documentation needs and prevent last-minute surprises.
👉 In short: Contract processors help lenders stay lean, compliant, and efficient, while ensuring veterans have a smoother experience.