What is a loan processing underwriter?
Underwriting a loan is the process of determining the eligibility of a borrower for a loan. Simply put, a loan processing underwriter is the individual responsible for determining the risk involved with a particular loan and how to best mitigate that risk.SignificanceUnderwriters work under a set of established guidelines that help them determine the viability of a borrower and his ability to repay the loan. Items such as past credit history, debt-to-income ratios and loan-to-value ratios all play into assessing a borrower’s potential for default.Decision MakingGenerally speaking, an underwriter can only make lending decisions based on a borrower’s results when measured against the credit policies. Underwriters are usually not permitted to alter the lender’s credit policy in order to qualify a borrower for a loan.GuidelinesLoan processing underwriters may have several sets of guidelines they can use in order to qualify a borrower for a loan. These may include both prime loan products a
