How to Choose a Mortgage Underwriting Service Provider

mortgage underwriting May 30, 2022

Mortgage lenders take on a risk with every loan. This risk is the inability to predict the borrowers’ ability to repay a loan on time.

It is the responsibility of underwriters to assess credit risk and determine whether a borrower will be able to repay the loan on time. Mortgage underwriting is an extremely process-oriented task. It involves a series of manual steps that are extremely difficult to streamline and keep track of. Any error in a single step has a domino effect on the entire mortgage underwriting process. This ultimately results in an underwriter giving a green signal to a borrower who does not have a credible financial history.

Mortgage underwriting services ease the pressure on underwriters by taking care of their basic but time-taking tasks. These tasks include duties such as verifying the borrower’s income sources, verifying the secondary market guidelines before issuing a loan, analyzing the borrower’s income-debt ratio, etc.  When a mortgage BPO provider takes over these daily tasks the underwriter is free to focus on his core and more complicated tasks.

 Mortgage support service increases the efficiency of the underwriter by leveraging the power of AI (Artificial Intelligence). It enables an underwriter to evaluate the borrower’s financial history, without having to manually go through scores of documents. It provides the underwriter the ability to pull out any document from any platform seamlessly. Mortgage support services provide tools based on ML (Machine Learning) to aid underwriter expedite their decision-making process.

Things to Consider Before Choosing a Mortgage Underwriting Service Provider

Finding the right underwriting service provider is like looking for a needle in a haystack. However, it is possible to narrow your search by following the below basic guidelines.

Verify that the provider has a strict policy of underwriting discipline

Underwriters do not have it easy because of high competition and frequently changing guidelines by mortgage authorities. You must ensure that the mortgage BPO under consideration doesn’t prioritize short-term financial gains over the delivery of quality service.

Ideally, you should evaluate the ratio of their work volume and their resources. If the work volume is more than their resources, it is safe to conclude that they compromise on underwriting standards. It may imply that they are biting off more than they can chew. This takes a direct hit on mortgage underwriting standards  

Assess their Experience

Only well-established organizations understand the need of adhering to strict deadlines and completing the underwriting procedure in a methodical manner. As a result, experience evaluation is one of the most important things to consider when picking an underwriter.

As a starting point, you can request a list of previous clients from the provider. You can get a decent idea of a vendor’s efficiency and reputation by checking with former clients. Make sure you speak to some of their prior consumers as well to ensure that they are reliable.

Study their Approach

The availability of the right information at the fingertip is essential for a mortgage underwriter to take decisions in an accelerated and efficient fashion. The faster the decision-making process is the more are the chances of lenders acquiring new customers.

Mortgage underwriting service providers liaise between underwriters and borrowers on a 24/7 basis to relay information as and when needed. This allows lenders a significant competitive advantage as they expedite one of the most crucial stages of mortgage lending.

You must partner with service providers who have resources working for them across different time zones. Such resources enable service providers to provide a 24/7 backend underwriting support to lenders.

Know the Technology they Use

Mortgage BPOs that provide customizable technology are your best bet when it comes to choosing the right underwriting service provider. They should ensure that the tools seamlessly integrate with the legacy loan origination system used by your underwriter.

These days all BPOs provide their client with the latest technology in automation to increase process efficiency and improve customer satisfaction.

 Automation software examines the customer data, detects financial irregularities if any, and then suggests new parameters the customer can meet to avail the loan.

Automated Underwriting systems (AUS) assess the loan seeker’s financial history which consists of documents such as their income statements, loan re-payment along with the total value of the property in question. The system then submits its report to the underwriter who makes the final call.

MSuite a Unique Tool that Meets All Your Mortgage Underwriting Requirements

Our in-house tool MSuite automates the various steps which are a part of the mortgage underwriting process. This tool runs on intelligent optical character recognition, AI, and ML algorithms to bring high rates of accuracy to the different processes of underwriting.

The OCR algorithms of Msuite are proficient in identifying and capturing data from various documents. It collects and stores all these documents digitally in a well-organised format.  MSuite comprises statistical models which speed up the processing of loan information and convert the documents into digital copies.

Msuite’s rule-based engine helps the mortgage underwriters by simplifying their complicated tasks such as credit review,1003 review income calculation, and updating calculated income. This tool is very efficient in upfront underwriting of documents related to the loan seeker’s salary. MSuite can be configured seamlessly with multiple rules as per mortgage underwriting disciplines.

It has data extraction and validation engines which do the task of accepting digital data points from various resources, like loan information, etc. It promises a high accuracy rate of over 98% while doing such tasks. This is very helpful for underwriters as they cannot take correct lending decisions without accurate financial data.

Here are some additional ways in which Msuite proves to be a valuable tool for the mortgage underwriters:

  • It uses an approach that is based on checklists to assess the loan documents. This ensures that the mortgage underwriter doesn’t miss out on any critical document.
  • It sends alerts to the underwriters when an information is missing from all the loan documents handed over by the loan seeker. This disqualifies the loan seeker until he furnishes the relevant documents.

Why Choose Us for Mortgage Underwriting Process 

The increasing demand for residential properties has changed the way money is invested in properties. Our mortgage underwriting services assist your underwriters to assess the financial profiles of borrowers accurately. Our streamlined services have helped our clients close loans faster.

We are well versed in using both Fannie Mae’s Automated Underwriting System, Desktop Underwriter or DU, and Freddie Mac’s Automated Underwriting System, Loan Prospectors.

Our underwriting support services ensure that your underwriters do not take borrowing decisions which will prove to be costly in the future. Msuite sends alerts to the loan officers whenever it detects a document to be missing and disqualifies the loan seeker.

We help you deal with changes in variable factors such as loan terms, which puts forth the need to freshly submit the loans to the automated system. We employ the best practices such as including accurate notes in the LOS to counter the system’s tendency to flag several re-submissions and to make sure processing of DU files is smooth.

Our fraud experts are highly experienced in identifying fraudulent mortgage loan applications. We are deft at spotting fraudulent activities like a mismatch of AVM comps, differing addresses, and unusually big cash deposits and withdrawals, etc

Who We Are and What Makes Us an Expert?

This article is bought to you by Expert Mortgage Assistance (EMA),  a provider of enterprise-grade end-to-end mortgage loan servicing solutions with considerable knowledge in prime residential and commercial mortgage markets. For our mortgage clients, we leverage cutting-edge technology to provide targeted and result-focused mortgage underwriting services. Our specialized underwriting solutions enable clients to quickly evaluate whether a borrower qualifies for a loan and the risks associated with that loan, saving them both time and money. 

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