Written By: Shawna Greene
Most of us who have been working in this industry have all sat in on trainings related to customer service and how we should be building rapport with our borrowers, being attentive to their needs, and just overall giving them a satisfactory experience. There are also other customers we should provide the same service to other than our borrowers and that is the other departments we interact with. We have our loan officers, loan processors, underwriters, loan closers, our shippers, real estate agents, sales representatives if with a homebuilder, settlement services, even our managers.
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At some point we all have to put our hands on the same borrower’s file. Providing them a with an exceptional experience means we all should be on the same page with each other. Loan processors have to interact with several parties on a loan transaction. We are all a team and should view each other that way in order to ensure we obtain quick financing for our borrowers and get them to the closing table on time. With this being said, out of all of our departments we should look at as our customers, our underwriters should always be on our minds when we are working with the borrowers. They may very well be the only party to the transaction that never gets to speak to a borrower if they need to know something.
They have to depend on us while trying to assess the risk of each borrower and making sure the risk is acceptable and the loan is able to be sold. So what is one thing we could do to help them out? Write them good notes! They can see anything that is on the application and documents we give them. What they don’t see is who the borrower really is outside of those documents and computer generated risk assessments of them.
The end result of writing good notes could lead to having an improved relationship with underwriters along with other parties involved in the loan, ultimately improving our customer service to the borrowers.
Ideas for Writing Notes to Underwriters
Underwriters review borrower’s loan application based on the 5C’s of Lending model. They are:
1. Character- Stability. Steady job, residence, pay bills on time, etc (The loan officer and loan processor can offer additional information about the borrower’s character because we are the ones they talk to.)
2. Capacity- Debt vs Expenses
3. Capital- Net worth. Total assets- liabilities. Checking, Savings, Investments.
4. Collateral- If property is worth the risk
5. Credit or Conditions-Evaluate credit usage, ability to repay, etc
They need to see detailed notes on our loans to get an idea of who our borrowers really are. We are in a position to offer enhancements to those 5 areas because we are the ones that get to see and talk to our borrowers and they don’t. Whether they have the best credit file or the worst, anything we can include to help the underwriter make a more informative assessment will help, even if it can’t be added on the application.
Our notes should show what a credit report or a bank statement can’t provide as well as highlight the compensating factors. This can include the person’s values, morals, thought process, and goals surrounding the 5 areas they look at. Asking questions out of the norm sometimes to get to know them better could also make them feel like we actually care about who they are and not just what they appear to be on paper. They can have things going on in their life that we can’t always document but it still can add strength to their file. The loan officer plays a very important part to this during application. Some things to think about speaking with borrowers on and making note of to the underwriter to help build their character are:
1. Education- Ask about what they went to college for and their accomplishments. If they didn’t go to school ask if they plan to and their reasons for doing so to show they are thinking about their future.
2. Job-When reviewing job history ask about promotions they have achieved, if their career is in line with their education, if they relocated or switched jobs for better opportunities and why they made their choices. Evaluate strength of the industry they work in and note if things look promising. Add a note about a part time job or a spouse’s job that provides additional income even though we aren’t using it.
3. Credit- If they have great credit ask about their views on credit and what they did to maintain it. They take pride in being responsible and letting us know even during rough times they make sure their bills are paid. If their credit is not so great but they are showing they want to turn things around ask about their plans to improve and what actions they have already taken. Review their credit explanation letters and ask more details to get an understanding of how they work to turn a negative situation around.
4. Assets- These show great strength to a file in the investors eyes. Whatever they have should be on their application even if they state it’s hard for them to locate terms and conditions sometimes for a 401k account. If they don’t have much money ask about their financial plan for their future and their families. They may actually be working towards a goal that will enable them to be able to save more money one day.
5. Risk Transfer- They may not have a lot of assets but many have mortgage protection insurances, whole life, other term and credit life policies, income replacement, cash accumulating policies, etc. It is beneficial to show if they have a disruptive event such as a job loss, illness, accident or death, then the risk of defaulting on the home is transferred to the insurance companies. They or their family can survive without losing everything.
6. Collateral- If home is located in a new development for example, then it will still be growing over a certain timeframe. Point out how the value of properties in there will be raising in value as extra homes are being built. Also good points to bring up would be about other properties they own especially if they are free and clear, evaluating the home values and showing they have additional resources to tap into if ever needed.
7. Strong support system- An individual that has supportive family can survive through some of the worst hardships and still maintain their home. It is good to learn about their marriage, family, and friendships in a subtle way of course.
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When we tell an underwriter the story of our borrowers and paint a full picture of who they are, they will be able to understand and relate to them as people and not just another file to get through. This helps us look good to our customers and gets us that nice customer service survey back!
About The Author
Shawna Greene - As an active NAMU® member, Ms. Shawna Greene is a Senior Loan Specialist working full-time with a major U.S. Homebuilder (NVR, Inc). Her work includes processing, training, and assisting loan closers. She has been in the mortgage industry for 12 years working in several aspects of the business including being a mortgage broker, loan officer, loan processor, servicing settlements, loan modifications, special loans, investor reporting, and mortgage defaults. Shawna enjoys this business and looks forward to helping many others learn about it as well. Shawna is also a mortgage instructor for Mortgage University University (www.MortgageUnderwriter.org). If you're interested in becoming a writer for NAMU®, please email us at: email@example.com.