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William J. Acres

What Exactly is "Underwriting"

Tuesday, September 27, 2011 - Article by: William J. Acres - Velocity Financial LLC - Message

We use the word all the time, but what does "Underwriting" mean... In the Mortgage business, underwriting is a process in which the documentation you provided along with your application and signed disclosures are inspected. The perception is that there's one person sitting at their desk, going through all your paperwork... The reality is that underwriting is a process, and it's possible that your file can be switched to as many as 40 different people, who will inspect your paperwork. What are they looking for?? FRAUD... they are flat out looking for fraud. They look for irregularities. If your job is to look at 2w's all day long, you will notice if one is not right... if you look at tax returns all day long, you will see any discrepancies if something isn't kosher... The lender is trying to be sure that everything is legitimate. Once the check has been cashed it's a lot harder to get the money back, so they do their do diligence ahead of time. This process can be very aggravating, especially in today's lending environment, so be prepared to be asked for additional documentation and letters of explanation, if your underwriter doesn't understand something in your file..

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