Mortgage loan underwriter

Mortgage loan underwriters ensure compliance with underwriter guidelines. They participate in the implementation of new underwriting guidelines. They also review closed and denied loans.

The duties of a mortgage loan underwriter include, but are not limited to:

• Authorizing and underwriting loans.
• Reviewing and verifying loan applications and supporting documentation.
• Analyzing loan risk and requesting additional information as necessary.
• Preparing reports on assessment findings.
• Making loan eligibility decisions and approving or rejecting applications.
• Reviewing and specifying loan conditions as necessary.
• Ensuring compliance with regulatory standards.
• Ensuring compliance with company policies and guidelines.
• Documenting and effectively communicating reasons for the approval/rejection of loans.
• Returning applications with additional documentation to the loan officer for review.

The following job titles also refer to mortgage loan underwriter:

loan underwriter
mortgage guideline underwriters
loan approval officer
loan underwriters
mortgage compliance underwriters
mortgage compliance underwriter
mortgage guideline underwriter

Bachelor’s degree is generally required to work as mortgage loan underwriter. However, this requirement may differ in some countries.

Mortgage loan underwriter candidates must have completed post-secondary education, for example, a bachelor’s degree in business administration, economics, or finance. The role is a regulated profession in most territories.

Mortgage loan underwriter candidates typically require a minimum of two years of experience in a Mortgage Underwriter Associate. A successful candidate will have experience working within the real estate or financial industry in addition to formal education, reviewing mortgage applications and financial documents.

ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:

• the nature of the work performed in an occupation in relation to the characteristic tasks and duties
• the level of formal education required for competent performance of the tasks and duties involved and
• the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.

Mortgage loan underwriter is a Skill level 3 occupation.

These occupations, although different, require a lot of knowledge and skills similar to mortgage loan underwriter.

mortgage broker
loan officer
foreclosure specialist
title closer
credit adviser

These occupations require some skills and knowledge of mortgage loan underwriter. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of mortgage loan underwriter with a significant experience and/or extensive training.

insurance rating analyst
actuarial consultant
bankruptcy trustee
investment analyst
securities analyst

This knowledge should be acquired through learning to fulfill the role of mortgage loan underwriter.

• Banking activities: The broad and continuously growing banking activities and financial products managed by banks ranging from personal banking, corporate banking, investment banking, private banking, up to insurance, foreign exchange trading, commodity trading, trading in equities, futures and options trading.
• Mortgage loans: The financial system of acquiring money by property owners or prospective property owners, in which the loan is secured on the property itself so that the property can be repossessed by the lender in the absence of payments due by the borrower.
• Property law: The law and legislation that regulates all the different ways to handle property, such as the types of property, how to handle property disputes and property contract rules.
• Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.
• Real estate underwriting: The process of evaluating applications for loans in real estate activities in which not only the prospective borrower but also the property being traded in is evaluated in order to assess whether the property will be capable of redeeming its value.

These skills are necessary for the role of mortgage loan underwriter.

• Analyse loans: Examine and analyse the loans provided to organisations and individuals through different forms of credit such as overdraft protection, export packing credit, term loan, and purchase of commercial bills.
• Examine mortgage loan documents: Examine documents from mortgage borrowers or from financial institutions, such as banks or credit unions, relating to a loan secured on a property in order to examine the payment history of the loan, the financial state of the bank or borrower, and other relevant information in order to assess the further course of action.
• Interpret financial statements: Read, understand, and interpret the key lines and indicators in financial statements. Extract the most important information from financial statements depending on the needs and integrate this information in the development of the department’s plans.
• Communicate with banking professionals: Communicate with professionals in the field of banking in order to obtain information on a specific financial case or project for personal or business purposes, or on behalf of a client.
• Assess mortgage risk: Assess whether the borrowers of a mortgage loan are likely to pay back the loans in a timely manner, and whether the property fixed in the mortgage is able to redeem the value of the loan. Assess all the risks involved for the lending party, and whether it would be beneficial to grant the loan or not.
• Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
• Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover against those risks.

This knowledge is sometimes, but not always, required for the role of mortgage loan underwriter. However, mastering this knowledge allows you to have more opportunities for career development.

• Foreclosure: The legal system surrounding the recovery of a loan or debt which a debtor or borrower has not completed the payments of and of which payments have been neglected by enforcing the sale of assets which were used as collateral for the loan.
• Securities: The financial instruments traded in financial markets representing both the right of property over the owner and at the same time, the obligation of payment over the issuer. The aim of securities which is raising capital and hedging risk in financial markets.
• Debt systems: The processes needed to obtain goods or services before payment and when a sum of money is owed or overdue.
• Credit control processes: The various techniques and procedures applied to ensure that credit is given to the suitable customers and that they pay on time.

These skills and competences are sometimes, but not always, required for the role of mortgage loan underwriter. However, mastering these skills and competences allows you to have more opportunities for career development.

• Apply credit risk policy: Implement company policies and procedures in the credit risk management process. Permanently keep company’s credit risk at a manageable level and take measures to avoid credit failure.
• Collect property financial information: Collect information concerning the previous transactions involving the property, such as the prices at which the property had been previously sold and the costs that went into renovations and repairs, in order to obtain a clear image of the property’s value.
• Advise on risk management: Provide advice on risk management policies and prevention strategies and their implementation, being aware of different kinds of risks to a specific organisation.
• Interview bank loanees: Perform interviews with candidates requesting a bank loan for different purposes. Pose questions in order to test the goodwill and the financial means of candidates for paying back the loan.
• Assess debtor’s financial situation: Assess the defaulter’s pecuniary circumstances by evaluating the personal income and expenses, and the balance sheet which includes the value of the house, bank account, car and other assets.
• Decide on loan applications: Take into account the risk assessment and analysis and perform the final reviewing of the loan application in order to approve or deny the loan, and set in motion the necessary procedures following the decision.
• Examine credit ratings: Investigate and look for information on the creditworthiness of companies and corporations, provided by credit rating agencies in order to determine the likelihood of default by the debtor.
• Manage loan applications: Manage the application process for loans from the process of interviewing the applicant and reviewing the documentation, assessing the risks, and accepting or denying the loan and ensuring compliance with the underwriting process.
• Maintain credit history of clients: Create and maintain the credit history of clients with relevant transactions, supporting documents, and details of their financial activities. Keep these documents updated in case of analysis and disclosure.
• Create underwriting guidelines: Create guidelines for the assessment of risks and determining whether acceptance of liability and granting payments is worth the risk for the organisation. Develop improved methods of analysis which ensure that all aspects of the underwriting process are examined.
• Consult credit score: Analyse the credit files of an individual, such as credit reports which outlines a person’s credit history, in order to assess their creditworthiness and all the risks that would be involved in granting a person a loan.

3312 – Credit and loans officers

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References

1. Mortgage loan underwriter – ESCO
2. Mortgage Underwriter Job Description | Indeed.com Canada
3. Mortgage Underwriter Job Description – Betterteam