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The Mysterious "Underwriter"

The real power behind the throne is the mysterious underwriter. Chances are you'll never even know your underwriter's name - let alone get the chance to sway them on the phone or in person. Play your cards right, and you can increase your chances of loan approval by this "all-important" figure.

As Mortgage Specialists, Southwest Funding, L.P. offers you the following pointers:

They're mysterious figures shrouded in secrecy and kept from public contact. Yet mortgage underwriters have the power to say "Yes" or "No" to the purchase of a home.

Understand the Underwriter's Role.
Most mortgage underwriter's are "grown-up" loan proccessors. They have been in the business for a respectable five, seven or ten years. As they used to work up cases at the front end, now they are making the rulings and judgements on the loan packages that others are now giving to them. The underwriter's role is to keep its firm from making bad loans that will sour in the company's portfolio or prove unsellable to outside investors.
This is called "risk analysis," and many underwriters, who are detail oriented, take the task very seriously.

Realize that the rules Underwriters use are inherently flexible.
All use "underwriting guidlines" to decide whether to approve or deny a loan. Their rule books typically come from the Federal National Mortgage Association (FNMA), also known as Fannie Mae, or the Federal Home Loan Mortgage Corp (FHLMC), also known as Freddie Mac. These organizations buy billions of dollars' worth of home loans on the secondary market each year.

What do the guidlines cover?
Among other things, they set "ratios" on income versus debt, define down-payment terms and itemize the documents an applicant must show to make his file complete.

Do you have problems in your credit history?
Then realize there is some "give" in the system and go about finding ways to convince your underwriter to make the loan.

How can you make yourself popular with the staff of a lending office?
Tell the complete truth and provide your information quickly.

Explain and Document any financial problems in your background.
Even though you will never meet the underwriter, you have a shot at influencing them via your Loan Officer, using statements and documents.

Did your credit take a hit after you took unpaid leave to help your mother recover from a car accident?
Type up a statement explaining this and attach copies of your mother's medical bills.

Is your income a little less than you need to qualify, yet you're due for a pay increase in just a couple of months?
Ask your boss for a letter to this effect on company letter-head.

Never submit fake documents to support your loan application.
Underwriters are trained in the art of fraud detection. They can easily spot a fake W-2 or falsified employer verification form. They can also see the red flag signaling problems that are hidden in bank statements and tax returns.
Besides being un-ethical, you're just plain screwed from the beginning; the cardinal rule of mortgage lending requires an underwriter to automatically disapprove any file that involves fraud.

Win the affections of your Loan Representative and Processor.
They could help you with the underwriter.
To guard against bias, some lending firms deliberately keep their underwriters in offices miles away from other company employees. But chances are good that your underwriter works "shoulder-to-shoulder" with those you are able to meet; whether through the same lending institution or a Mortgage Broker.
In these situations, your loan rep and processor could be especially influential. In borderline cases, they may even go to the extent of writing a letter to promote the chances of your file being approved.

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