Written By: Frankie Lacy, Op-Ed Writer
Underwriters are required to juggle new production, condition review, emails, and phone inquiries each day. In addition, managers, processors, and sales professionals may approach underwriters throughout the work day for assistance on a variety of issues. As a result, underwriters must streamline their process flow as much as possible. One of the ways to accomplish this is to have a handful of resources readily available for use at all times.
Favorites or Bookmarks Bar:
All internet browsers have a favorites or bookmarks bar that allows easy access to frequently used websites. Underwriters should have the following sites bookmarked:
-All relevant Fannie Mae, Freddie Mac, FHA, VA, and USDA sites including lending guidelines and AUS sites.
-All investor and private mortgage insurance websites.
-Third party vendor sites for credit reports, AVM’s, and fraud detection services.
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Income Calculation Worksheets:
Income sources, such as rental and self-employed, that require a detailed and in-depth analysis should be calculated using Excel or PDF worksheets. Utilizing worksheets reduces human error, as these forms often have mathematical formulas built in. All underwriters should have up-to-date forms that allow for data inputs related to rental and self-employed income. The forms should have spaces to add back depreciation, depletion, etc. In addition, there should be room for deductions such as, meals and entertainment or unreimbursed expenses. These forms are also essential in meeting the Qualified Mortgage and Ability to Repay underwriting standards as set forth by the CFPB.
Policies, Procedures, and Underwriting Memos:
In an effort to maintain consistency and quality, lenders will issue frequent communications updating underwriters on new requirements or areas where the company is seeing a trend of deficiency. The company will also issue memos updating all operations and sales staff regarding new policies or procedures that are put in place for the loan process flow. Finally, underwriters usually attend monthly or quarterly meetings where various topics are discussed. Underwriters should maintain a binder or a digital folder to keep track of all of these documents. They will come in handy as resources to ensure adherence to the most recent policy changes when decisioning loan files.
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List of Conditions:
There are dozens of conditions an underwriter will use in as many different loan scenarios. It is difficult to maintain consistency in the wording of those conditions if a list is not maintained in a Word document. Underwriters should use Word to ensure correct grammar and spelling, as well as editing the content of the condition until it is clear and concise. Conditions can be copied and pasted directly into the loan origination system when drafting approvals.
For ultimate efficiency, the conditions should be separated by program type (such as conventional, FHA, USDA, etc.). Under each program type conditions should be listed in order of who clears them: underwriting, processing, closing, or post-closing. Personally, I change the font color of a key word in the condition to make them easily identifiable for use. For example, if the condition is “Borrower to provide the fully executed gift letter, proof of deposit of gift funds, and evidence of donor’s ability to gift”, I might change the words “gift funds” from black to red. This way, as I scan my list of conditions, I can jump right to gift funds for a quick copy and paste.
About The Author
Frankie Lacy - As an op-ed writer, Ms. Frankie Lacy is a 15+ year mortgage industry veteran with extensive conventional mortgage underwriting experience. 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.
