The Importance of an Experienced Underwriter
For every borrower there is a lender and for every collateral there is a loan. The mortgage industry collectively offers a wide variety of loan programs in order to match the broad-spectrum of borrowers and collateral; from the “hard to qualify for” low rate conventional loans, all the way to Shakespeare’s “pound of flesh” moneylender Shylock.
Nothing exemplifies better the tradeoff of “Risk-Reward” like the mortgage industry. Borrowers with excellent credit, great collateral, lots of capital and income, will get the best loans at the lowest rates. In short, those who don’t need a loan make the best borrowers. Borrowers with terrible credit, awful collateral and no money or income will need to ask their uncle Vinny for a loan.
Account Executives, Loan Originators and Mortgage Brokers will vet a loans scenario and try to match the borrower and collateral with the right lender and loan program. However, it is not until the Mortgage Underwriter gets involved that the reality of whether or not the borrower and collateral qualify for a specific loan is determined.
The more experienced the Account Executives, Loan Originators or Mortgage Brokers, the more accurately they can match the borrower and collateral to the lender and loan program. By the same token, the more experienced the Mortgage Underwriters the more ways they can find to get your loan approved.
The primary function of a Mortgage Underwriter is to assess risk. But, some institutional Mortgage Underwriters as well as some inexperienced Mortgage Underwriters, function more as a fact checkers than a risk assessor. These underwriters will have a checklist of parameters to see if the loan meets a fixed set of lending criteria and will issue an approval or disapproval based on this checklist. If everything checks out the answer is Yes, if there is something wrong the answer is No.
On the other hand, an experienced Mortgage Underwriter will not only find what is wrong with a given loan scenario, but will also be able to determine if there are any mitigating factors that will offset this negative item. Or, more importantly, in some cases, the Mortgage Underwriter will be able to help the borrower correct these issues altogether to get the loan approved. If, however, the loan is still disapproved, an experiences Mortgage Underwriter, having already reviewed your file, can point out what the issues are and who, if any, may be a fit for your loan scenario.
If you are having problems getting your loan approved, ask to see if another underwriter can take a look at your file. A new set of eyes could make the difference.