by Laura Bramble
Without an underwriter's approval, loans do not get funded and closed.
The most important person in the mortgage approval process is the person you will never see or meet. That person is the underwriter. No lender funds or closes on a loan without the approval of an underwriter. Sometimes her job is to simply check over the figures, make sure all paperwork is in order and give her approval. Other times, she must look over all of the paperwork and make a sound decision based on her experience and good judgment.
Loan Approval Requirements
Many times a loan file requires manual underwriting because it falls into a gray area that the automated system cannot address. Manually underwritten
FHA (Federal Housing Administration) files are quite common, since FHA loan guidelines allow for no credit history and troubled credit buyers, along with more flexible debt rules. The loan officer and loan processor carefully compile manual files to read almost like a story, with lots of supporting detail. They provide not only the basic information on employment, income and savings along with a credit report, but they also may include a created credit history for no-credit borrowers, additional information about credit blips in a buyer's past or explanations for discrepancies in income or job history information. This documentation gives the underwriter the "whys" that allow her to make a more informed decision about the buyer's situation in order to truly determine how solid a risk the buyer is.