What Does a Mortgage Underwriter Do?

A mortgage underwriter is the person at the mortgage company who takes all the information related to your mortgage file and reviews it. Then, based on lender requirements, the underwriter makes a decision as to whether the lender will extend a loan to you.

To complete this process, the underwriter reviews documents such as bank statements and tax returns. He or she also looks at credit reports, property surveys, titles, and appraisals.

Just as important, the underwriter is also making sure that the loan is compliant with federal regulations. Keep in mind that, by law, your lender has to provide you with certain disclosures within certain time frames, and you must acknowledge in writing that you received them.

If any of this information is missing, or if documents were dated outside of the allotted timeline, then the loan is out of compliance. If this isn’t caught by the underwriter, it could cause significant issues for the lender if this were to be discovered after the loan is sold.

Selling loans to investors after the loan is closed is a common lender practice, so these details are crucial. When the lender sells a loan, they receive money from investors that they can then use to write new loans.

Borrowers are often surprised by how much detail that mortgage lenders and their underwriters ask for when the borrower’s loan is being processed. The list of items can often seem overwhelming, but the many details provided are used to demonstrate to potential investors that everything that needs to be there is accounted for.

The last thing that any lender wants is what is called a defective loan. Depending on the nature of the defect, the lender may have to repurchase this loan from the investor. To avoid these costly mishaps and keep the process moving smoothly for everyone, the underwriter ensures all the buyer’s and lender’s ducks are in a row for each transaction.

Do you have additional questions about underwriting? Contact your mortgage professional for more details.