Document preparation (also known as “doc prep”) is a key step in the lending process and involves generating documents for closing. Banks and credit unions commonly employ doc prep specialists or teams who are responsible for ensuring accurate, timely document preparation.
Doc Prep at Banks and Credit Unions
Although specific processes vary among financial institutions, most doc prep work falls within the following categories:
- Inputting Data into the Core: Doc prep teams serve a final quality control role by ensuring all approvals, loan presentations, loan packets, borrower credit information, collateral, and other documentation is in proper order. Assuming no exceptions, the doc prep team inputs loan data into the core and completes the booking process.
- Generating Documentation: Financial institutions often rely on loan documentation systems and/or loan origination systems, which access booked loan data in the core and generate closing documentation. Promissory notes, security agreements, and disclosures are examples of such documents.
- Sending Documents for Signature: If loan documents are to be signed with a “wet signature” (i.e., ink on paper), the doc prep team will use “File>Print…” or a similar computer command to print paper documents. For loans to be closed electronically, the doc prep team will likely export digital versions for eSignature. Doc prep teams must work closely with lenders and loan assistants to facilitate a smooth handoff of documentation prior to closing.
Efficiency in Doc Prep
To avoid closing delays, financial institutions should focus on building efficient doc prep processes, systems, and teams. Detail-oriented staff equipped with the right loan documentation technologies help avoid oversights, loan booking issues, and recordkeeping problems.
Ensuring efficiency and accuracy in doc prep also enhances the impact of downstream systems like AccuAccount from Alogent. For example, AccuAccount checks for new loans booked to the core and pulls in updated borrower, credit, loan, collateral, and other details.
Visit Alogent’s Innovation Hub for additional resources for bankers.
