Re-defining the Underwriting Role

Written By: Frankie Lacy

What are some things that come to mind when we think about the underwriting role? Do you think of the mysterious department in the back where everyone speaks in hushed tones? Do you picture a big, red denial stamp and a person with a maniacal gleam in their eye? If you do, then it’s time to examine the underwriting role more closely.

As underwriters, we wear many hats in our day to day function; customer service provider, researcher, collaborator, and guideline guru. We often work for long periods in silence as we focus on the details of each loan, but we’re also working in concert with other departments as we determine how a loan should be structured.

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Usually our form of customer service is demonstrated when we interact with internal customers, namely loan officers, processors, and closers. We answer questions on active loans and new loan scenarios. We provide information on the best way to clear the more difficult conditions. We provide solutions to the problems that our internal customers set on our desks. In this role, underwriters must be flexible, approachable, and friendly.

As researchers, underwriters reach out to title companies, other lenders, investors, government agencies and more to find answers. When faced with a unique or difficult loan scenario, it is our job to think outside the box and be resourceful. Many people don’t associate creativity with the underwriting role, but it’s true! It takes a creative thinker to find ethical, compliant solutions to some of the challenges we encounter on loans.

As collaborators, we work with title companies, investors, and government agencies to develop a loan package that is salable on the secondary market. We often modify our conditions and come to a compromise with interested parties to make sure we have sufficient documentation to support our loan. We strive to make the correct loan decision on the first review, but we’re often superseded by management or investor requirements. Experienced underwriters have thick skin and do not take it personally when their decisions are questioned. Much of our learning experience comes from these collaborative efforts.

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Finally, underwriters must work to earn their designation as a guideline guru. Does this mean we learn each guideline by heart and can recite them from memory? Certainly not! However, we must become experts at navigating guidelines and rooting out each rule for each loan characteristic. The only way to become a guideline guru is through practice: look up guidelines on each loan, spend time learning to use the search functions, and study the layout of each guideline website.

Now when you think of an underwriter, you should picture someone who is focused, but friendly. You’ll know that underwriters are decision makers, but we’re also flexible. And you can see the underwriter as an individual who has invested a lot of time (and maybe some sweat and tears) into becoming an expert at researching and finding the right solution for each loan.


About The Author

Frankie Lacy - As an active NAMP® member and a NAMU®-CMMU designee, Ms. Frankie Lacy is a 13-year mortgage industry veteran with extensive conventional mortgage underwriting experience. Frankie is also a mortgage instructor for Mortgage Underwriter University (www.MortgageUnderwriter.org). Topics of Frankie's expertise include: Fannie Mae, Freddie Mac, USDA Rural Housing, underwriting to investor overlays, self-employed borrowers, personal and business tax return analysis, rental income, condos/co-ops/PUDs, and more. Frankie is a Davenport University graduate with a degree in Business Administration. If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.

 

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Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.