Part Three of the Loan Process
The underwriter’s role is to assess the risk of the proposed loan and make recommendations whether to approve the loan. In addition, the underwriter will ensure the loan package is in compliance with not only applicable laws but with the lender’s policies. The underwriter will typically use an underwriting checklist to make sure all components, elements, and conditions are considered and/or included, and that a credit memo or other written summary of verified information, recommendations, and conclusions of the underwriter will be completed.
The underwriter will carefully consider the ability/capacity and willingness/desire of the consumer/borrower to repay the loan as well as the adequacy of the collateral. This analysis is based on:
1. Information contained in the loan application and supporting documents;
2. Information developed by the lender in checking the credit and character of the prospective consumer/borrower;
3. Verification of employment, bank deposits, etc. of the consumer/borrower;
4. A review of the information obtained in the preliminary “title” and appraisal reports and from the property due diligence;
5. A interview with the consumer/borrower either telephonically or in person; and,
6. A review of the specific loan file to ensure compliance with the lender’s policies and procedures, including the loan product being offered to the consumer/borrower.