Once a loan application is signed, the lender begins a process that typically includes ordering the fee appraisal, the title report, and a number of third party inspection, compliance, and engineering reports in an attempt to make sure the potential borrower did not misrepresent the property in any way in the original loan submission package. This process is more commonly referred to as:

Question

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Due diligence is the process undertaken by the lender to verify the information provided by the borrower in the loan application. It involves a thorough review of various reports and inspections to ensure the property is as represented and to identify any potential risks or issues. This process is critical in making informed lending decisions and mitigating risk for the lender. Choices B, C, and D are not accurate descriptions of this process.

Once a Loan Application Is Signed, the Lender Begins a Process