Underwriting is frequently done in investment banking, insurance and commercial banking. Generally, underwriting means receiving payment for the willingness to cover a potential contingent risk. In investment banking, underwriting is the practice by which investment bankers represent corporate and government entities in the initial public offering of their securities. The investment bankers cover the risk of selling the securities to the public.
Proper implementation and set up of your LOS: The proper implementation of your LOS is the segue for an efficient mortgage department. This is imperative if you want exceptional performance from your mortgage department. Typical operations are too busy being reactive trying to close the next loan only to put off necessary planning.
Make sure you have rules in your software set up for each step of the loan process.
This makes it simple for the person working in the LOS and reminds them of functions that need to take place when set up properly.
Individual employee education plan: If you want your team to be the best, put together employee education plans specific to their level of expertise.
This allows you to design employee specific education plans to further their depth of knowledge. Most CE continuing education is generic at best and the entire staff is required to take the same classes. To have better MLOs, they need to know how to process and underwrite, additionally to have better processors they need to document files as an underwriter would.
Mold your education programs with this concept in mind. Also, frequent meetings with the staff to evaluate the work flow and problems that have been incurred creates a more efficient operation.
What worked yesterday may not work as well today, always look for ways to improve. Measuring your mortgage loan originator MLO: The single largest problem most operations incur is the lack of education and accountability for MLOs.
This is the most critical step to starting off properly the relationship with the borrower and how fast you get from application to clear to close. This can be done easily with a quality check that measures the loan files submitted, accuracy and completeness of the application and loan documentation.
Compare the percentage of loan applications that close to the number of loan applications submitted, pull through report per MLO. What is an acceptable percent for you organization? I know some mortgage operations that have over a ninety percent pull through and have viewed others that had as little as eleven percent.
People get better when their performance is measured and you hold them accountable. The goal here is complete applications with all the proper documentation on the first submission.
The additional issue with not measuring MLOs is the processor receives poorly documented files. When you have to continuously go back to your borrower and ask for additional information after the initial application you are flirting with reputational risk.
When they do the MLO is asking for additional information that should have been asked for up front, sound familiar.
The key is the proper ongoing education, quality checks and accountability. Measuring loan processor performance: Once again setting the proper expectations, making sure your processor is receiving good quality continued education specific to the position is critical.
Measuring days from receipt of loan to submission to the underwriter per processor.
Why does one processor consistently have loans submitted to underwriting in five days yet another processor takes ten days. How many conditions does each processor receive back from the underwriter? Measuring underwriter touches to loan files: Review of underwriting conditions should on average reflect no more than two touches, if there are more than it leads to frustration for all involved in the process.
If you hold the MLO accountable and measure the processor performance the loan file can go from application to a pre-underwrite within days.
This is a great way to run your operation for exceptional service to the borrower and for your staff to close additional loan volume.The hotel loan market has been on a good run for the last twelve months with competition among lenders heating to a point not seen since prior to the financial crisis.
Measuring loan processor performance: Once again setting the proper expectations, making sure your processor is receiving good quality continued education specific to the position is critical. Hotel financing can be used to build, buy, renovate, or refinance a hotel or motel.
The four main types of hotel loans are SBA 7a loans, SBA loans, USDA B&I loans, and conventional bank loans. A good example of this is real estate tax, where lenders will underwrite to the greater of actual taxes or what taxes will be if the lender has to step into the property (based on the loan amount for some lenders, or the actual appraisal value for others).
The history of mortgage performance over the last decade offers the opportunity to distinguish mortgage programs and combinations of borrower and loan characteristics that work (i.e., perform well in stressful economic environments) from those that don’t.
ZAS HOTELS - Underwriting Guidelines ZAS for the hospitality market segment is able to consider a wide variety of hotels, including limited service, full service, resorts and boutiques.