Approaching a mortgage processor for mortgage underwriting services

Posted by peoplesprocessing on November 6th, 2019

Mortgage underwriters play a heavy role and play a major role in the financial industry. The mortgage writer is responsible for the approval or disapproval of loan applications for mortgage. The procedure for underwriting typically includes evaluating as well as confirming the loan applications and finding out whether the borrower or client has the financial ability to pay back the loan.

A company that offers the services of mortgage underwriting analyzes the mortgage documents in five major underwriting areas. These areas are credit, appraisal, income, fund and title). They also calculate the LTV (loan-to-value ratio) as well as the DTI (debt-to-income ratio) (front end and back end ratios) using the documents submitted by the borrower and providing the detailed report to the senior writers:

Credit analysis

Typically, mortgage writers are solely in charge of making the decisions on the approval or denial of any client’s mortgage loan servicing. This is made possible by the relevant information that was duly provided during the application process. The mortgage underwriting company analyzes the character of a borrower (that is the willingness of the borrower to pay back the loan) and credit worthiness (the ability of the buyer to pay back the amount being borrowed) through analysis of the credit report, bankruptcy, judgments, foreclosure, divorce decree, verification of rent (VOR), child support, alimony paid documents and so on.

Property Analysis

The mortgage underwriting company also analyzes the property of the borrower in detail based on appraisal reports, property profiles, CD, rental agreements and calculation of hazard insurance, real estate taxes and mortgageinsurance and so on. During the property appraisal the mortgage underwriters makes sure that the property specifications as well as the loans terms satisfy the pre requisites of the company as well as with the regulations of the government.

Funds Analysis

This is an assessment of the reserve funds owned by the borrower, just in case, they are unable to pay back the loan through the primary sources. An instance of the borrower not being able to payback is in the case where their employment is interrupted for any reason, they should still have enough cash to pay up their mortgage.

The most typical sources of fund in this analysis, is the borrower's checking and savings account. Other sources include retirement funds, investments and any other liquid source of funds.

Income Analysis

The mortgage underwriting company analyses the capacity of the borrower to pay back the borrowed sum through income documents such as paystubs, tax return, W-2’s and so on). This is done by the use of a comparative method known as the debt-to-income ratio. This is assessed by adding the monthly liabilities and obligations and dividing this by the borrower's monthly income.

Analysis of titles to properties

Mortgage underwriters also analyze the legal ownership of the property through the title documents that were submitted for the property. Typically, a lender would not want to give out money for a house that had legal issues. That is the reason for performing a title analysis in order to ensure that the property is transferrable in the event of a default.

Post assessment and approval

As soonas the loans have been critically examined and reviews have been completed to ascertain the extent of risk, the underwriters will then record the relevant causes as to why the loans were granted or denied. This is subsequently stored in the collection of documents into its official loan records.

Peoplesprocessing.com is a subsidiary of Direct Mortgage Corporation, a mortgage banker which is licensed to operate in multiple states of the United States of America and it conducts wholesale as well as correspondent business. Peoples processing provides the entire package of mortgage underwriting services and many more services.