Underwriters: The Last Word on Mortgages
September 30, 2016 / Michael Hitt, Senior Vice President — Insurance Operations
It’s a rarity for anyone seeking home financing to meet or speak to the underwriter of their loan, but it’s ultimately the underwriter’s job to decide whether the mortgage is approved.
As an underwriter, you determine whether a mortgage application meets your requirements by undertaking a painstakingly detailed process to weigh every detail of the loan file.
You evaluate a number of critical factors, including income, credit history, debt ratios, and savings. You commonly describe these elements as—credit, capacity, and collateral—which are better known as the “the 3 Cs.” For those who aren’t underwriters, here’s a quick summary of the 3 Cs:
- Credit is an analysis of how the borrower has used credit in the past. A borrower’s credit report is an important predictor of the borrower’s ability to make future payments on time and in full.
- Capacity answers the question, “Does the buyer have the resources to repay his or her mortgage?” To answer that question, you closely analyze the borrower’s employment, income, debt, and assets. You have a keen focus on the borrower’s debt-to-income ratio and whether it matches your requirements—after verifying current savings and other accounts.
- Collateral focuses on the value and type of property the borrower is seeking a loan for. To ensure the loan amount doesn’t exceed the property’s value, you meticulously analyze key documents, including the appraisal.
In addition to making sure the 3 Cs meet guidelines, you also ensure that the required tax, title, insurance, and other closing documentation are in place.
"United Guaranty has a deep appreciation of the work you do managing risk and helping people buy homes they can afford now and in the future. Our mortgage insurance underwriters provide an extra set of eyes to give lenders additional peace of mind."
As an underwriter, you must work very quickly, but with an intense attention to detail. You know your job has a high level of accountability since your decision often determines whether the loan is approved.
United Guaranty has a deep appreciation of the work you do managing risk and helping people buy homes they can afford now and in the future. Our mortgage insurance underwriters provide an extra set of eyes to give lenders additional peace of mind.
With that two-pronged approach, United Guaranty offers rescission protection1on full-file submissions from the date of closing when the lender provides accurate loan file information.
In addition, with full-file submissions to United Guaranty, loans are underwritten according to requirements that allow insurance eligibility for expanded loan amounts and credit scores, as well as loan-level exceptions.
Following an intensive three-year effort to make full-file applications faster and easier for lenders, United Guaranty now has the quickest full-file turnaround in the industry. With underwriting teams deployed across four time zones and more than 130 underwriters, we can help maximize productivity for underwriters like you. United Guaranty is proud to be able to offer 24-hour turnaround.
We sincerely appreciate the efforts of all the underwriters we work with and consider you partners and an essential part of United Guaranty’s larger aim to make reviewing loan applications simpler and easier.
1 For full terms and conditions of coverage, please refer to your United Guaranty Master Policy.
As Senior Vice President—Insurance Operations, Michael Hitt oversees underwriting, loss management, loss mitigation, investigations, and appeals. His goals for the operations team are to make the right decision on every loan and work to maximize efficiency and productivity without sacrificing quality, which are the guiding principles of United Guaranty’s risk management philosophy.
Hitt joined United Guaranty in 1996. He was named Vice President—Insurance Operations in 2012 and was promoted to Senior Vice President in 2013.
Prior to moving to operations, Hitt led the Business Analytics team responsible for developing operational metrics across the organization, providing valuable insight into developing efficiencies, and improving capabilities within the sales and operations teams.
Since joining United Guaranty, Hitt has managed groups in several other areas, including digital operations, training, business systems, underwriting, claims, loss mitigation, and servicing.
He holds a B.A. in mathematics from Clemson University.
© 2016 United Guaranty Corporation. All rights reserved. United Guaranty is a registered mark. United Guaranty is a marketing term for United Guaranty Residential Insurance Company and United Guaranty Mortgage Indemnity Company. Coverage is available through admitted company only.