Underwriting (AKA “UW”) is the process by which your lender verifies your income, assets, debt and property details in order to issue final approval on your loan application. In other words, they give the “final” stamp of approval for the lender to approve you for the loan amount you’ve requested!
At Advisors, we follow the “traditional” route of underwriting. This means that underwriting happens after a Loan Processor fully reviews and documents the file. We like to consider processors as “Jr. Underwriters”. Once Underwriting gives the final stamp of approval, the next step for the file is closing!
From a lender’s perspective, an Underwriter helps ensure that the file is in compliance and that there’s nothing fraudulent. • They also review the file to ensure it follows Fannie Mae or Freddie Mac guidelines to verify the borrower is eligible for the loan amount they requested. • If the loan being reviewed is a non-conforming or “jumbo” loan, then the underwriter will compare the loan against the jumbo investor’s guidelines, which can vary from investor to investor. From an UW’s perspective, when they issue a CTC on a loan, their name stays onto it for the life of the loan. This means that if there are any issues down the road, the UW may be held responsible for missing something.
Loan Compliance coordinators review the file once in the Underwriting Queue to ensure things like there are no blank documents, items are dated and signed, and to make sure everything is in order.
Once a file is in the status of “Ready for UW” it is then officially in the underwriting queue, waiting to be assigned to an underwriter that reviews the file. • Each Underwriter has different loan programs that they review, depending on what they’ve trained and are certified for. • i.e. conventional, FHA, USDA, etc. • Once a file is assigned to an underwriter, the status is moved to “UW Accepted” within Byte which means, the file has been assigned and it is now in their pipeline.
Underwriters review your credit history, your income, your assets, and the property.
By: Jon Iacono