Pre-Approval Letter

With LO Toolkit, you can easily generate and send a personalized pre-approval letter with the details borrowers need to start their homebuying journey.

• Pre-approval letter requirements
• Pre-approval letter overview
• Pre-approval letter customization
• Generating the pre-approval letter
• Sending the pre-approval letter
  • Sending the pre-approval letter to the primary borrower
  • Sending the pre-approval letter to the co-borrower
  • Sending the pre-approval letter to a Real Estate Agent

Note: The Pre-Approval Letter (PAL) is a component of the LO Toolkit suite of services.

Pre-approval letter requirements

The loan team can generate a pre-approval letter from the lender workspace. For lenders configured with the pre-approval letter borrower self-serve workflow, the pre-approval letter will be generated at the end of the borrower application. These are the requirements for generating a pre-approval letter.

• Role Permissions - Users need the following permissions set to Always.
  • Pull credit
  • Run DU
  • View pricing
  • Send pre-approval letter
• Credit must be pulled*
• Automated Underwriting Service (AUS) must be run*
  • Loan teams can send a pre-qualification letter based on an "approve/eligible" and "approve/ineligible" result from AUS.
  • In the borrower self-serve workflow, pre-approval letters are only generated upon DU returning an "approve/eligible" result.
    Note: The borrower self-serve workflow does not support Loan Product Advisor today.
  • Pre-approval letters will not be generated on a "Refer with Caution" AUS result.
• A loan product must be applied to the loan.

Note: Lenders can choose to remove the AUS requirement for pre-approval letters. This option is for lenders who do not use Desktop Underwriter® (DU) or Loan Product Advisor® (LPA) and trust their loan officers to determine when it is appropriate to send a pre-approval letter. Lenders who choose to remove the AUS requirement will also not need to run credit to generate a pre-approval letter, since the credit run is only required for AUS.

Pre-approval letter overview

Once created, the letter can be previewed and sent to the borrower and the borrower’s real estate agent. The pre-approval details and some of the verbiage in the letter are configurable. Below is an example letter but your letter may appear slightly different based on your specifications. Contact your Blend representative or Blend Support for more details.

Lenders can specify which terminology to use "pre-approval/pre-approved" or "pre-qualification/pre-qualified."

Pre-approval letter customization

Refer to the image below to learn which components of the pre-approval letter are customizable and configurable.

Note: Changes to this feature will affect all uses in your organization. If you are a Blend administrator and would like to make any changes, please contact Blend Support.

Generating the pre-approval letter

The pre-approval section of the application header will display "Ready to send" when the required information to send a pre-approval letter is met. Click Send letter in the loan header to open the pre-approval letter dialog and fill out the details.

• Pre-approved purchase price - Will be pre-filled from the application. The Loan amount and downpayment fields will auto-calculate when the purchase price is updated.
• Message to borrower - Loan teams can use this feature to include a personalized message in the pre-approval letter.
• Pre-approval contingent on sale of property - Select Yes or No.
• Who are you sending the letter to? Pre-approval letters can be sent to borrowers, co-borrowers, and real estate agents.

Click Preview to view the pre-approval letter in a new browser tab before sending the letter. From there, the pre-approval letter can be downloaded or printed.

Note: The “Message to borrower” text box and “Pre-approval contingent on sale of property” field are optional features. Contact your Blend Support if you would like this enabled for your environments.

Sending the pre-approval letter

To send the pre-approval letter:

1. Click Send letter in the loan header overview.
2. Fill out the Send pre-approval letter details.
3. Select the recipients.
4. Click Send letter.

Pre-approval letters can only be sent to primary borrowers, co-borrowers (both sharing and non-sharing), and real estate agents. The intended recipients must activate their accounts to access the document in their respective portals.

After sending the pre-approval letter, the date of the most recent send will be displayed. The button text will change to “Edit letter” and a new link to “View letter” will appear in the space.

A copy of the pre-approval letter will be listed in the DOCS tab of the lender workspace.

Note

• Blend does not currently support any other way of sending pre-approval letters outside the options described below.
• Pre-approval letters cannot be generated once TRID is triggered or post-application export.

Sending the pre-approval letter to the primary borrower

The primary borrower is always available to select on the “Send pre-approval letter” dialog.

If the primary borrower has not yet activated their loan hub, the button on the bottom right will change to read “Invite and Send Letter.” If your environment is configured to require that borrowers are activated before sending a pre-approval letter, the checkbox will be grayed out.

An optional configuration is available that prevents loan team members from inviting primary borrowers if the email address for a co-borrower on the loan has not been added. With this configuration, loan team members will see a pop-up message to remind them to add this information in the “Manage borrowers” page. Contact your Blend representative to enable this feature in your environment(s).

Otherwise, loan team members will begin the Invite borrower workflow. The loan team can send the pre-approval letter through the Application and Follow-ups or Follow-ups only invitation options.

Sending the pre-approval letter to the co-borrower

In Blend, co-borrowers are not automatically invited to activate their loan hub until the primary borrower invites them. The pre-approval workflow will reflect this, and co-borrowers will be grayed out unless they have activated their loan hub.

Sending the pre-approval letter to a Real Estate Agent

To send a pre-approval letter to real estate agents, loan team members must add the buyer's real estate agent to the loan in two places: the "Manage third parties" interface and the Contacts section of the application.

Adding a real estate agent to the Contacts section will allow the agent to access this loan in the agent app, and adding them in the “Manage third parties" interface allows them to see the pre-approval letter.

Adding the Real Estate Agent as a third-party

1. Click Manage third parties.
2. Click Add recipient.
3. Choose Real Estate Selling Agent from the Third party type list and fill out the realtor's details.
4. Click Save.
   

Adding the Real Estate Agent in the Contacts section

1. In the Application tab, scroll down to Contacts.
2. Click + Add contact.
3. Set the contact type to Real Estate Agent.
4. Enter the rest of the agent's details and click Save Changes.
   

After adding the real estate agent as a third party and a contact, they'll receive an activation email. They must activate their account before they become available recipients when sending the pre-approval letter.