15 Apr, 2021

Ways to Improve Efficiency in your Underwriting Process

Ways to Improve Efficiency in your Underwriting Process

Mortgage Processing is complex and data-intensive. With the rise in mortgage requirements over the years, the competition among lenders has been increasing too. To stand apart and offer the customers the best, time, efficiency, and accuracy of loan processing remain vital and so does the process of underwriting.

Financial experts with comprehensive knowledge about the mortgage industry, underwriters act as the key decision-makers in loan processing. Their work includes evaluation of all the documents, cross-checking and verifying credit scores, eligibility requirements of loan products, and review the borrower’s capacity to repay the loan. However, with growing volumes, it is essential to ease the burden to reduce burnout. To streamline the processes, many lenders now opt for mortgage underwriting support to reduce the time and increase the closing ratio.

With expanding mortgage operations, Jr. Underwriting is an interim process used to lower the cost of underwriting and to improve operational efficiency. Jr. Underwriting helps in the initial validation process and performs the essential due diligence right at the loan onboarding stage. Jr. Underwriting or Pre-underwriting helps in ensuring that the docs submitted to the underwriter are complete, hence reducing the iterations, costs and minimizes delays in closing. Lenders often use Pre-underwriting support services to ensure that they send only the selective best customer loan profiles to the underwriter’s table.

How can Jr. Underwriting Improve Efficiency in your Underwriting Process? Let’s dwell deeper by breaking it down into simpler terms.

Optimizing Pre-underwriting Process:

Often the iterations between the borrower and the loan officer take up time and effort while unduly acting as a bottleneck to the overall process. Jr. underwriting can help lenders reduce this overhead by organizing all the necessary documents and other mandatory inclusions ahead of underwriting, hence save the underwriter’s time and helping in streamlining the underwriting process. This in turn can help in reducing production costs and speed up mortgage underwriting. Jr. Underwriting takes care of data-heavy processes like File Review wherein all the information provided undergoes verification and missing information is tagged to be collected. This is followed by an evaluation of the borrower’s credit profile as per the lender’s compliance standards which are then entered into the underwriting system, following which it is reviewed for inconsistencies, and thereafter all the records are validated. The process further includes running a Fraud Analysis to ensure that nothing is overlooked.

The entire purpose of pre-underwriting is to increase the overall processing speed by allowing the underwriters to direct their efforts and time only towards underwriting successful loans and hence increasing the number of loan closures.

For many lenders, pre-underwriting support services come in as a workable solution that too with little addition to the cost. But with growing competition among servicers, finding an ideal vendor becomes tough.

The Need for a Mortgage Processing Vendor:

While most vendors offer mortgage underwriting support services, the ones with a stronghold in pre-underwriting support services and the team to make it happen may not be always readily available. It is essential to identify trusted vendors with domain expertise who implement a meticulous level of review and validation of loan prequalification steps to improve the speed and efficiency of the underwriting process.

Mortgage Processing Vendors offer not just an expandable team but an experience-based approach to better identify the qualifying factors or the lack of it in a mortgage loan application. Opting for pre-underwriting services can help in preventing the depletion of resources by sorting out the non-approvable submissions from the loan application pipeline. This allows the mortgage lenders to run a more effective mortgage loan underwriting process while bypassing the applications which would eventually fall through.

It is essential hence for lenders to team with mortgage lenders who specialize in quick pre-underwriting procedures and handle such tasks accurately and efficiently. The mortgage pre-underwriting services can seamlessly blend with the loan boarding systems and deliver pre-underwritten loans to assist in the underwriter’s decision-making process and make the approval process faster.

What Makes Peoples Processing a Good Choice for Efficient Underwriting?

At Peoples Processing, we evaluate loan files in the order of our checklist and prepare for loan closing, prep disclosures for real estate procedure settlement act (RESPA) and truth in lending act (TILA) along with pre-disclosures, and run compliance verification to check if loan files comply with state and federal laws. Our established process includes restructuring loan files for seamless management and validation of the processed files to meet your underwriting needs besides compilation of the data to create home mortgage disclosure (HMDA) reports. Talk to us today and we will be able to help you as well with your underwriting process. Get in touch with us today!  

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