Outsourced Mortgage Underwriting Experts Analyze Borrower Income Prior to Approving Loans

Outsourced mortgage underwriting becomes necessary when a mortgage processor wants to save money and time. Outsourcing is a trend you should consider following whether you are broker or a lending company.

Houston, TX (prHWY.com) August 2, 2012 - Outsourced mortgage underwriting becomes necessary when a mortgage processor wants to save money and time. Outsourcing is a trend you should consider following whether you are broker or a lending company. Underwriting is undeniably one of the hardest tasks of loan processing. It is also a very sensitive activity requiring only a professional approach. The problem faced by many mortgage processors is lack of enough financial resources to employ enough underwriters. The companies that have employed enough underwriters also face the challenge of keeping and paying their staff when the business is down. Outsourced mortgage underwriting companies exist to take away the burden of managing internal staff affairs. These companies usually carry out their duties in a remote office and they make sure that communication with their customers is both effective and efficient.

They carry out the underwriting process the way many lenders prefer. Some of these organizations are very big and boast thousands of qualified employees. They have a lot of experience with lenders and it is just impossible for them not to understand your needs. Outsourced mortgage underwriting organizations consider income and liabilities as the main items that determine if an applicant deserves to be approved for a home loan or not. First they consider a loan applicant's income sources. The income is examined closely because it is the only insurance that lenders have after approving house loans. An outsourced mortgage underwriting professional does not merely verify that a loan applicant has an income. They go further to estimate the likelihood of the revenue continuance in the future. To begin with, they consider monthly proceeds resulting from fixed and hourly contracts. Then they focus on any part-time profits that are expected to be earned for twelve to twenty-four months.

Commissions, overtime and perks are only considered if there is a report that shows that an applicant has received them for two consecutive years. An outsourced mortgage underwriting expert also focuses on social security and retirement income of a pre-qualified home loan applicant. If an applicant has regular rental earnings from other investment properties, your underwriter will accept this as a viable income source. Underwriters generally dismiss earnings from trusts, dividends, and notes receivable unless there is a proof showing that a borrower has received them for one year. Even if they are accepted, an applicant is asked to provide a report showing the flow of wages for three extra years. Any form of salary that comes from self-employment is very closely monitored by an outsourced mortgage underwriting contractor.

According to many lenders, a business that is less than two years old cannot be used as a risk-free income source. Using factors such as depreciation, tax returns and capital expenses, an underwriter is able to come up with an adjusted gross income figure. This figure is approved only if it coincides with the standards set for the self-employment income source. The applicant's liabilities are also reviewed before a borrower's file is approved. These include leases, loans and credit cards debts. If an applicant is a co-signer for a friend's loan, their probability of being approved for a home loan is lower. A borrower who possesses the fewest liabilities is thought to show high cash management abilities and is likely to be approved for a home loan quickly. As you can see from the above information, there is a lot of work that an Outsourced mortgage Underwriting service provider can do on your behalf.

Mortgage Loan Processors helps mortgage brokers and bankers cut costs. There are many Outsourced mortgage loan processing services that cater to Mortgage Brokers and Lenders nationwide with a structured process to ensure success.

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Tag Words: mortgage outsourcing, mortgage processing, mortgage underwriting

Categories: Accounting

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