A Sample of Business Finance Memo: Important Steps in the Mortgage Process

To: Pat and Gale

From: Mrs. Donovan

Date: 18/6/2018

Subject: Mortgage Process

In this memo, I am glad to explain to you the critical steps involved in a mortgage process.

To finance the purchase of the lot through a mortgage, PI owners have to undergo a pre- approval process. This is getting a Tri-merge credit report that shows your credit score and history. PI will make an offer to the lot seller, and then apply for a mortgage loan by filling a Fannie Mae form 1003 (Cornett, 2018). The mortgage will be processed. The loan processes gather documents relating to the borrower and the property and prepare a file for the underwriting process. Some documents contained in the file are tax records, bank statements and purchase agreement.

An underwriter will scrutinize all mortgage documents checking compliance with lending guidelines.  The underwriter can reject the application if eligibility requirements are not met. He’ll also assess the risk involved, credit, capacity and collateral. If all requirements have been met, the file will be labeled “clear to close” to confirm approval. The mortgage is then closed.

PI should be aware of pre approvals that are not done properly, hidden fees and fixed rates. The lender may opt to perfect the security given whereby the lender guards the collateral from other claimers, through registering it with the statutory authority responsible.

The lender has a right to possess the property legally via foreclosure. PI’s remedy in this case is right of redemption. The remedies available to PI include; engaging debt collection agency, Self-help remedies, court process, securing transaction, lien right and involuntary bankruptcy proceedings.

PI should keep the umbrella safely until the customer comes to collect it. They should also contact the customer to pick their umbrella if they have his contacts.

Ownership has already been transferred to the customer though possession is with PI. PI is responsible for safekeeping of the paint until the customer collects it. The paint is under temporary custody of PI. In this case, bailment has occurred (Reuters, 2018).

Kind Regards,

Mrs. Donovan

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