A Loan Underwriter is a professional who plays a crucial role in the lending process by assessing loan applications and determining the risk associated with them. Their expertise helps financial institutions make informed decisions about granting loans to individuals and businesses. In this blog post, we describe the primary responsibilities and the most in-demand hard and soft skills for Loan Underwriters.

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Main Responsibilities of a Loan Underwriter

The following list describes the typical responsibilities of a Loan Underwriter:

Advise

Advise borrowers on financial status and payment methods.

Aggregate

Aggregate range as approved by Credit Risk Management.

Analyze

Analyze applicants' financial documents and credit history.

Answer

Answer scenario and qualification questions from the sales staff.

Apply

Apply advanced expertise on commercial loans.

Approve

• Approve or denies mortgage loans in a correspondent lender environment.

• Approve or rejects loan application or requests additional information.

Assess

• Assess collateral value and suitability.

• Assess the overall risk and credit quality of loans.

• Assess the risk and eligibility of loan applicants.

Assign

Assign loan risk ratings.

Assist in

• Assist as needed with annual HUD and financial audits.

• Assist Credit Analysts as needed.

• Assist in any quality control audit findings.

• Assist in clearing or resolving any issues.

• Assist in the development of loan underwriting policies.

• Assist the retail sales network in identifying training or process opportunities.

• Assist with training and guidance as assigned.

• Assist with training and guidance as assigned by Underwriting Manager.

Attend

• Attend occasional SBA training seminars and webinars to maintain your knowledge base.

• Attend training on applicable subjects when available and appropriate for position.

Calculate

Calculate debt-to-income ratios and loan-to-value ratios.

Certify

Certify and provide a final Workbook to the Processor.

Clear

• Clear property and credit conditions placed on the loan, as required.

• Clear or resolve any issues.

Coach

Coach and mentor assigned operations staff.

Collaborate with

• Collaborate with loan officers and other stakeholders.

• Collaborate with loan servicing teams.

Collect

Collect and analyzes financial and related information related to new and renewal loans.

Communicate with

• Communicate underwriting decision (in written form) to the submitting processor.

• Communicate with appraisers, insurance agents, and attorneys.

• Communicate with various team members throughout the transaction.

Complete

• Complete a thorough analysis of loan files to determine compliance with investor and BECU guidelines.

• Complete daily, monthly, and / or quarterly reporting as required.

• Complete required bank training on a timely basis.

Conduct

• Conduct background checks and verify applicant information.

• Conduct risk assessments on loan portfolios.

Confirm

Confirm accuracy of all income, loan-to-value and other calculations.

Determine

• Determine appropriate loan terms and conditions.

• Determine terms and acceptability of risk of prospective business.

Develop

• Develop and provide reporting on key metrics as required.

• Develop a strong knowledge and proper use of the bank's mortgage loan products.

• Develop referral networks to locate prospects for loans.

Ensure

• Ensure adherence to any client overlays.

• Ensure adverse action notifications are handled according to regulatory guidelines.

• Ensure all credit decisions are documented and input in accordance with industry and Bank guidelines.

• Ensure all goals and service level agreements (SLAs) are met.

• Ensure compliance with anti-money laundering regulations.

• Ensure compliance with bank and statutory / regulatory guidelines.

• Ensure compliance with federal agencies including FNMA, FHLMC, HUD, and VA.

• Ensure compliance with lending policies and guidelines.

• Ensure information is complete, timely, and accurate.

• Ensure privacy and security of files.

• Ensure regulatory compliance as applicable.

• Ensure that files are complete, accurate and compliant.

• Ensure timeliness, accuracy and productivity levels established by management.

Evaluate

• Evaluate all documents and conditions loan accordingly.

• Evaluate appraisal reports, preliminary title reports, and other property reports.

• Evaluate loan applications for completeness.

• Evaluate loan collateral.

Explain

Explain rationale behind credit decisions, and / or to sell / promote line products.

File

File loan applications and supporting documents.

Follow

• Follow all compliance regulations including HMDA, Reg Z, Reg B and RESPA.

• Follow AUS findings and the bank's loan policy and guidelines.

Gather

Gather critical customer feedback to help transform and streamline processes.

Guide

Guide customers through the loan application process.

Handle

• Handle confidential and sensitive information securely.

• Handle customer complaints and take appropriate action to resolve them.

Identify

• Identify any exceptions to current policies.

• Identify areas for process improvement.

• Identify issues and recommend appropriate resolution within policy service level agreements.

• Identify other problem areas and initiate proper mitigation action.

• Identify potential fraud or misrepresentation.

• Identify risks and assists in structuring the loan to mitigate risks.

Inform

Inform Processor of any additional items necessary to substantiate loan request.

Initiate

Initiate the SAFE registration process immediately after your employment start date.

Issue

• Issue Denials and 2nd tier manager reviews.

• Issue underwriting decision and notifications of clear to close.

Keep

• Keep accurate records of loan decisions and processes.

• Keep current on all underwriting guidelines and practices including our investors.

• Keep informed on all compliance rules impacting mortgage lending.

Maintain

• Maintain all underwriting quality standards.

• Maintain good housekeeping practices within the work area.

• Maintain loan files with complete and sufficient documentation.

• Maintain relationships with borrowers and loan officers.

• Maintain superior level of customer service with customers, bank employees and department members.

• Maintain underwriting activity logs.

Make

Make recommendations on loan approvals or denials.

Manage

Manage multiple loan applications simultaneously.

Mentor

Mentor and train Underwriters I and II.

Monitor

• Monitor loan repayment schedules and collections.

• Monitor vendor performance if required, submits monthly reports to management.

Order

Order mortgage insurance from authorized vendors and follow the program requirements.

Originate

Originate appropriate client letters.

Participate in

• Participate in loan committee meetings.

• Participate in the development of new products and services.

Perform

• Perform any duties of Senior Credit Analyst as assigned.

• Perform commercial real estate loan stress tests.

• Perform complex financial and risk analysis.

• Perform prudent underwriting on all conventional and portfolio loans as offered by the Credit Union.

Prepare

• Prepare for and support any outside loans reviews performed by or for the Bank.

• Prepare loan approval or denial letters.

• Prepare loan presentations for appropriate approval authority.

Present

• Present analysis and recommendation to Loan Committee for a final decision.

• Present completed loan credit memos to LiftFund's loan committee.

Prioritize

Prioritize daily workflow from a queue-based system to maximize efficiencies.

Process

Process development and reengineering as necessary to meet the ongoing needs of the business.

Promote

Promote a team environment fostering a positive working environment.

Provide

• Provide administrative support to easyfinancial branch network by administering a 3.

• Provide excellent customer service to all parties.

• Provide exceptional customer service throughout the loan process.

• Provide explanations and guidance to loan applicants.

• Provide guidance and support to the RLC and Processor when required.

• Provide subject matter expertise in all aspects of the Mortgage life cycle.

• Provide timely, complete and accurate response to inquiries.

Read

Read tax returns and financial statements.

Render

• Render credit decisions in alignment with internal, investor and insurer underwriting guidelines.

• Render final decision on pipeline of loans and recommend decisions on loans that exceed authority.

• Render a decision within his / her lending authority.

Represent

Represent the department and company at insider tradeshows as necessary.

Resolve

• Resolve discrepancies or issues related to loan applications.

• Resolve post-close and audit items related to underwriting.

Review

• Review all credit documentation.

• Review and approves all Trusts.

• Review and audit files for compliance with agency, portfolio, government, and investor guidelines.

• Review and clear conditions as required so that all parties understand the status of the loan.

• Review and validates income and asset documentation.

• Review disclosures to assure compliance with appropriate guidelines and TRID.

• Review for stability of residency and employment.

• Review loan documentation for accuracy and compliance with regulations.

• Review loans to ensure they meet the investor, agency, and regulatory requirements.

• Review of title commitments to verify ownership, lien(s) and position.

Send

Send requests as needed for any additional information that will help determine loan risk.

Stay updated on

Stay updated on industry trends and regulations.

Support

Support and contributes to the quality and customer satisfaction goals of the bank.

Take

Take the lead in resolving problems for his / her own loans.

Train

Train and mentor junior underwriters.

Underwrite

• Underwrite and assess credit quality of consumer loan, residential mortgage loan.

• Underwrite credit worthiness of borrower.

Update

Update System(s) with pertinent information and appropriate data as required.

Utilize

• Utilize software system to assembles documents in loan files, including acceptance or denial.

• Utilize systems and tools to ensure that the RLC's are updated on the status of loans.

• Utilize the LOS system for the underwriting and decision making of all loans.

Verify

Verify income per established policy.

Most In-demand Hard Skills

The following list describes the most required technical skills of a Loan Underwriter:

1. Proficiency in financial analysis and risk assessment.

2. Strong knowledge of lending regulations and guidelines.

3. Ability to evaluate creditworthiness based on financial statements.

4. Understanding of loan structuring and pricing.

5. Familiarity with loan origination software and systems.

6. Expertise in interpreting credit reports and scores.

7. Competency in performing cash flow analysis.

8. Knowledge of underwriting principles and techniques.

9. Understanding of loan documentation and legal requirements.

10. Ability to calculate complex financial ratios accurately.

11. Proficiency in spreadsheet and data analysis tools.

12. Knowledge of property valuation methodologies.

13. Familiarity with loan pricing models and interest calculations.

14. Ability to analyze complex income sources, such as self-employment.

15. Understanding of industry-specific underwriting guidelines.

16. Knowledge of mortgage lending and regulations.

17. Proficiency in risk mitigation strategies.

18. Ability to assess the impact of economic factors on loan repayment.

19. Competency in interpreting appraisals and property reports.

20. Strong mathematical and analytical skills.

Most In-demand Soft Skills

The following list describes the most required soft skills of a Loan Underwriter:

1. Excellent attention to detail.

2. Strong written and verbal communication skills.

3. Analytical thinking and problem-solving abilities.

4. Sound judgment and decision-making skills.

5. Time management and organizational skills.

6. Ability to work under pressure and meet deadlines.

7. Customer service orientation.

8. Adaptability and willingness to learn.

9. Collaboration and teamwork.

10. Ethical and professional conduct.

Conclusion

Loan Underwriters play a crucial role in the lending industry, ensuring that loans are granted responsibly and in compliance with regulations. They possess a unique blend of technical skills, such as financial analysis and risk assessment, as well as soft skills that facilitate effective communication and decision-making. By understanding the main responsibilities and required skills for Loan Underwriters, individuals aspiring to enter this profession can equip themselves with the knowledge necessary for success in this demanding yet rewarding role.