Mortgage Underwriter Role During The Mortgage Process
This blog will cover and discuss the mortgage underwriter role during the mortgage process. For borrowers ready to apply for a residential mortgage loan, there is a process they must go through, no matter which mortgage lender they choose. Once borrowers decide on a mortgage lender, the loan officer will complete and sign a formal mortgage application, also known as 1003. In the following sections, we will cover the role of the mortgage underwriter during the mortgage loan process.
Documents Required To Start The Mortgage Process
The loan officer will request documents such as the following:
- two years of tax returns
- two years of W-2s, 60 days of bank statements
- Other documents that might be necessary, such as pertinent documents for those who have filed bankruptcy, had a foreclosure, deed-in-lieu of foreclosure, or had a short sale.
The Role of the Loan Officer and Mortgage Processor Before Getting Assigned to the Mortgage Underwriter
The loan officer will also run a credit check on you and your co-borrower; your credit report will be part of your mortgage process. Once borrowers provide the necessary documents, a mortgage loan processor will review the mortgage application and be prepared to submit it to a mortgage underwriter. This article will cover and discuss Mortgage Underwriter Role And Function In Mortgage Process.
Underwriting The Loan Application By The Mortgage Underwriter
Once the mortgage application has been processed, it gets submitted to the lender’s underwriting department and gets assigned to a mortgage underwriter. A mortgage underwriter is probably the most important person in the application process. The mortgage underwriter is the person that decides whether a borrower gets a mortgage approval or denial.
Preparing The File With Complete Documents For The Mortgage Underwriter
Suppose the loan officer and mortgage loan processor has prepared the mortgage package in an orderly fashion with proper letters of explanation so the mortgage underwriter can easily understand and navigate the file. In that case, the chances of getting limited conditions will be likely. However, suppose the loan officer and mortgage processor have submitted documents with missing pages and did not submit all documents that have been requested. In that case, the chances of getting mortgage underwriting delayed and possibly suspended are great.
How Mortgage Underwriters Process A Borrower’s File
Mortgage underwriters are equivalent to IRS auditors. They will scrutinize every single aspect of the mortgage application. If someone intends on pulling a fast one, such as a bogus letter of explanation, they need to think twice. Mortgage underwriters have heard every story in the book; their job is to ensure that every item listed on the mortgage application is accurate. A mortgage underwriter will only sign off if they can see proof, such as canceled checks or other official documents.
Mortgage Conditions Conditioned With The Conditional Loan Approval
Many loan officers and loan processors get aggravated with mortgage underwriters because mortgage underwriters can be extremely anal and request ridiculous conditions. Once we submit the requested conditions, we can get another set of conditions from the same mortgage underwriter. Common sense is why I didn’t ask for all the conditions simultaneously. Sometimes we get multiple sets of conditions after we submit the initial conditions.
Mortgage Companies Rely Heavily on the Underwriter to Make Sure Borrowers Have the Ability to Repay
We cannot whine or bitch at the underwriter. This is because we are at their mercy in getting mortgage approval. We need to realize that mortgage underwriters have an enormous responsibility as well. If they make a single mistake, the wholesale mortgage lender cannot sell the mortgage loan to the secondary market. Like many professions, there are great underwriters and mediocre underwriters.
An Example of the Perfect Underwriter
I recently submitted a conventional mortgage loan for a client who had a deed-in-dlieu of foreclosure two years ago but met Fannie Mae’s guidelines in qualifying for a conventional loan with a 20% down payment. I closed on this loan this afternoon. I submitted this conventional loan to the underwriter and it was assigned it to this loan was Christine David.
Not all underwriter has the same type of underwriting style. Some underwriters are more strict than others.
Underwriter Christine David is probably, hands down, the best, most professional underwriter I have ever seen in action in the 20-plus years in business as both a real estate investor and mortgage banker. Once I got the file submitted to underwriting, I got conditional approval from Christine David. . The conditions were extremely reasonable and were upwards of 30 plus line items.
Teamwork Among the Processing, Operations, and the Underwriter
Christine David requested that our processing staff accumulate and submit all the conditions simultaneously. Our processing staff followed her instructions. It took us several days to accumulate the requested conditions from our borrower.
There is only one mortgage underwriter that is assigned to a mortgage borrower. The mortgage underwriter who does the initial underwriting and issues the conditional loan approval is the underwriter that clears conditions and issues the clear to close.
Once we had it all ready, we resubmitted it to Christine David. Within 24 hours, Christine David returned to our processing department and needed clarification on the documents we submitted. 80% of the conditions were signed off, but 20% of the conditions needed clarification. It took us less than a day to get the conditions requested by Ms. David, and we submitted them back to her. Within 24 hours, Christine David issued a clear to close.
Working With An Experienced Underwriter Is Key To a Smooth Mortgage Process and Closing on Time
Today was the closing date, and we had a final glitch because of being $800 short and able to source that. Christine David was on standby and told me what she needed. I got her what she requested, and she signed off on the wire.
The mortgage underwriter is the person who makes the decision of whether of not the borrower qualifies for a loan and issues the clear to close. The mortgage underwriter is the most powerful person in the mortgage process that determines whether or not the mortgage loan applicant gets a loan approval or not.
Fantastic teamwork and an example of having a professional underwriter like Christine David. Ms. David made an almost delayed to make the deal happen. This is a perfect case scenario of how having a rock star mortgage underwriter like Christine David, who is hands-on and thinks outside the box, made a family, my borrowers, super happy and made their dreams of homeownership a reality.
