Which duty is performed during the servicing step of the lending process?

Receiving and posting payments is a key duty performed during the servicing step of the lending process. This stage involves managing the ongoing relationship between the lender and the borrower after the loan has been originated. Specifically, it includes handling the regular payment schedule, processing payments made by the borrower, and ensuring that these payments are accurately credited to the borrower's account. This function is critical as it helps maintain accurate records, manage the loan's amortization schedule, and ensure compliance with loan agreements.

In the context of the other activities mentioned, approving or denying the loan request is an action that takes place during the initial underwriting process. Gathering supporting documentation occurs beforehand as lenders assess a borrower's eligibility for a loan. Disbursing loan proceeds is another separate stage that involves providing the funds to the borrower upon approval of the loan, typically happening at the closing of the loan. All these actions are distinct from the servicing step, where the focus is primarily on managing the loan after it has been established.