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A mortgage underwriter decides whether to approve a borrower for a home loan and if so, under what repayment terms. According to the Bureau of Labor Statistics (BLS), growth in this employment category is expected to grow 6 percent by 2020, even with the housing market slowly rebounding after a dramatic downturn that included a subprime mortgage crisis. Be a mortgage underwriter by obtaining the necessary education, training and experience before you apply for jobs.

Underwriting steers the loan through the complicated analysis of various risks with the goal of producing a mortgage that minimizes such risks to the permanent investor. Accuracy and efficiency in the underwriting process are essential elements in minimizing risk to your company. The processes used to analyze elements of a loan application are constantly changing due to technological advances, new regulation and new loan products. Stay current with industry changes through MBA’s numerous programs and products for underwriters.

Banks and lenders across the country are casting their nets to try to find qualified mortgage loan underwriters — there’s a demand for around 5,000 in the immediate future. But there’s a catch: Banks are having trouble finding them.
In the wake of the subprime mortgage crisis, qualifications for mortgage underwriters have changed.
“Before, anybody could be an underwriter,” said Paul Hindman, the managing director of Management Advisors International, a N.C.-based finance recruiter. “You just took your senior processor and promoted them to an underwriter. But underwriting guidelines are constantly changing with the credit market. And you need professionals who are keeping up with that, and there aren’t enough of those.”

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    The Need

    For as long as people take out loans, there will be a demand for the underwriters who make sure applicants qualify for those loans. The Bureau of Labor Statistics projects the demand for loan officers, including underwriters, to go up at least 10% by 2018. And this is after accounting for the job loss that the increasing automation of the process will cause.
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    The Pay

    A junior underwriter could start off at a salary of $40,000 to $50,000 a year, Hindman said. A senior underwriter could make up to $75,000 to $80,000 a year. Reed Piano, the managing director of the National Association of Mortgage Underwriters, added that, typically, all underwriter jobs come with full benefits, like health insurance and paid vacation.
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    New Requirement

    In the wake of the subprime mortgage crisis, caused in part by lenders giving out loans without verifying applicants’ income and assets, the process of approving a loan has become much more rigorous. Underwriters now need to file what is known as a “form 4506” to verify an applicant’s income.
    Another tricky part about underwriting is learning to work in tandem with the software that comes with the job, instead of relying solely on it to produce the right output, as had been the practice of many underwriters in the pre-subprime days. Most lenders use proprietary systems to validate loans, but recruiters say that over-reliance on Automated Underwriting Sytems (AUS) in recent years has undermined the manual skills of discretion and familiarity with regulations the job requires.
    Nitin Dave, a retired senior business manager at Fannie Mae said: “The real role of an underwriter is to verify the information that goes in the AUS. Otherwise, it’s a classic case of garbage in, garbage out.”

     

Quick Overview of Topics And Skills To Be Covered

 

  • Analyzing the FHA appraisal
  • Handling property considerations
  • Repair inspections
  • Conditional Commitment Completion
  • Appraisal analysis
  • Checklist
  • Acceptable Comparables
  • RED Flags
  • New construction properties
  • Underwriting the credit
  • Technical review
  • Fraud control
  • Handling conditions
  • Applying judgment to underwriting
  • Completing the FHA transmittal summary
  • About This Training:
  • Required experience level: High

 

Students taking this course should already have these minimum skills:

  • Calculating refinance & purchase transactions using new guidelines
  • MIP refunds
  • Current knowledge of all FHA origination and processing guidelines
  • Obtaining FHA case numbers and appraisals
  • Documentation of borrower’s income and assets