Mortgage underwriters help lenders minimize the risks involved in offering mortgage loans. They assess the financial position of prospective borrowers and determine whether they qualify for a mortgage. These professionals, who typically need at least a high school diploma and a mortgage loan originator license to get hired, work for banks, credit unions, building societies and loan-giving government agencies such as the Federal Housing Administration.
A mortgage underwriter analyzes mortgage applications and renders an appropriate decision. She studies applicants’ employment profiles and credit histories, and calculates their credit worthiness. If an applicant meets collateral standards and other lending requirements, the underwriter approves the application and forwards it to a senior mortgage loan officer. If an applicant failed to submit some financial documents, such that it is impossible to render an accurate decision, the underwriter may suspend the application as she acquires the missing information from the client.
Dealing With Brokers
Although some prospective purchasers of real estate property deal directly with lenders, others use intermediaries such as mortgage brokers. As such, mortgage underwriters have a duty to build positive relationships and maintain communication with these brokers. In the case where an underwriter rejects a mortgage application, for instance, he must communicate the decision to the applicant’s broker and answer any questions that may arise. When negotiating loan rates and pricing with the brokers, the underwriter focuses on ensuring that both the lender and client’s interests are met.
Mortgage underwriters must adhere to relevant federal and state laws and regulations. When reviewing applications, for example, they must not impose loan rates based on an applicant’s race, sex, color, disability or religion, in accordance with the Fair Housing Act, which is enforced by the U.S. Department of Housing and Urban Development. Underwriters have a responsibility to keep track of regulatory changes, preferably by reading industry publications or consulting mortgage attorneys on a regular basis.
Effective mortgage loan processing requires underwriters to be organized individuals who are good at managing records. These professionals have a duty to keep accurate physical or electronic records of clients’ applications. They must adopt a filing system -- such as keeping suspended applications in a common safe -- that improves the work flow of the loan processing team. Mortgage underwriters also produce reports detailing the trends in the approval, suspension and rejection of applications. Lenders use these reports to, for instance, adjust the collateral requirements of various mortgage loan products.
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