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Key Responsibilities and Required Skills for Residential Mortgage Underwriter

💰 $55,000 - $120,000

mortgageunderwritingfinancebankinglendingcompliance

🎯 Role Definition

We are seeking an experienced Residential Mortgage Underwriter responsible for evaluating mortgage loan risk and compliance to determine borrower eligibility for home financing. The Underwriter will apply automated underwriting systems (DU/LP/GUS) and manual underwriting criteria across conventional, FHA, VA, USDA and portfolio products; interpret credit reports, tax returns, bank statements and appraisals; document clear underwriting decisions; and partner with originators, processors, closers and QC to deliver accurate, timely loan decisions while maintaining regulatory and investor compliance.

📈 Career Progression

Typical Career Path

Entry Point From:

  • Loan Processor (Residential)
  • Junior/Associate Underwriter
  • Mortgage Loan Officer / Originator

Advancement To:

  • Senior Residential Underwriter
  • Underwriting Team Lead / Manager
  • Mortgage Operations Manager or VP of Underwriting

Lateral Moves:

  • Quality Control Analyst (Mortgage QC)
  • Mortgage Compliance Specialist
  • Loan Origination Systems (LOS) Administrator / Trainer

Core Responsibilities

Primary Functions

  • Review full mortgage loan files (conventional, FHA, VA, USDA, and portfolio products) end-to-end to determine creditworthiness and compliance with investor and agency guidelines; render approvals, suspensions, counteroffers or denials with clear, documented rationale.
  • Interpret and validate automated underwriting system (AUS) findings (Desktop Underwriter / DU, Loan Prospector / LP, GUS, FHA TOTAL) and apply agency overlays or compensating factors for manual reviews and exceptions.
  • Analyze credit reports and credit scores, identify derogatory credit events (collections, bankruptcies, foreclosures) and determine allowable seasoning and compensating strengths consistent with underwriting policy.
  • Perform comprehensive income analysis for W-2 employees, self-employed borrowers, and non-traditional income (1099, seasonal, commission, rental income), including tax return analysis (1040s, schedules), P&L statements, K-1s, and profit adjustments.
  • Conduct asset verification and source-of-funds review, including bank statement analysis, gifts, retirement account documentation, escrow, and acceptable down payment documentation; flag and investigate large deposits.
  • Evaluate property collateral by reviewing appraisal reports (including exterior/in-person and desktop appraisals), identify appraisal exceptions (comps, condition, zoning, marketability) and determine acceptability per investor requirements.
  • Review title commitments, preliminary reports and survey exceptions; identify and clear title issues or required title conditions prior to closing.
  • Assess borrower debt-to-income (DTI), loan-to-value (LTV), combined LTV (CLTV) and residual income calculations to determine sustainable payment capacity and maximum loan sizing.
  • Underwrite and document manual underwriting decisions when AUS is not conclusive or when overrides/compensating factors are necessary; prepare underwriting narratives and condition lists for clear-to-close decisions.
  • Coordinate and communicate underwriting conditions and status with loan officers, processors, closers, escrow/title partners and sales channels to maintain transparency and minimize closing delays.
  • Issue clear-to-close and approval letters consistent with TRID, RESPA and investor disclosure needs; ensure all closing conditions are satisfied and documented in the loan file.
  • Maintain turnaround-time (TAT) targets and daily/weekly production metrics while managing a pipeline of loans across various product types with competing priorities.
  • Escalate complex or high-risk loans to underwriting management or credit risk for decisioning and track exception approvals, variance logs and investor waivers.
  • Ensure compliance with federal and state mortgage regulations including ECOA, HMDA, RESPA, TILA/TRID, HMDA, HOEPA, QM rules and investor overlays; prepare adverse action notices when required.
  • Audit and quality-check loan files for completeness, documentation accuracy and adherence to internal underwriting policy and external investor guidelines.
  • Review mortgage insurance (MI) requirements, lender-paid MI structure, and ensure accurate MI rate/binder setup for conventional loans when applicable.
  • Evaluate refinances for seasoning requirements, streamline refinance eligibility, and document benefits of refinance (rate/term vs cash-out) when required by guidelines.
  • Participate in re-underwriting or post-closing file review remediation when borrower or collateral red flags surface during QC or investor repurchase activity.
  • Apply judgment to specialty or non-conforming scenarios (bank statement programs, stated income, self-employed complex income, non-owner occupied, investment properties, second homes and portfolio products) and document rationale for acceptance or denial.
  • Use loan origination systems (Encompass, Calyx Point, Byte, MeridianLink, Ellie Mae) and internal LOS workflows to update conditions, status and generate underwriting documents and decision logs.
  • Maintain current knowledge of investor guideline changes (Fannie Mae, Freddie Mac, FHA, VA, USDA), rate sheet/pricing overlays, and lender policy updates; implement new policy changes into daily underwriting practice.
  • Provide mentorship, training and feedback to junior underwriters, processors and loan officers on common file deficiencies and documentation standards to improve first-pass clear-to-close percentages.

Secondary Functions

  • Support ad-hoc underwriting research and exception requests for complex loan scenarios, providing written interpretations and recommended actions for management approval.
  • Participate in cross-functional process improvement initiatives to streamline documentation flow, reduce TAT and minimize repurchase risk.
  • Assist with investor delivery file reviews and pre-funding audits to ensure investor documentation and post-closing delivery requirements are satisfied.
  • Contribute to internal policy documentation, underwriting manuals, and job aids used by underwriting and processing teams.
  • Help respond to state and federal compliance inquiries, internal audit requests and external investor audits by providing file-level underwriting explanations and documentation.
  • Collaborate with mortgage technology teams to test and implement AUS/LOS integration changes, automation of repetitive underwriting checks and improvements to condition generation logic.
  • Support occasional loan pipeline triage during peak volume periods and assist coverage across product lines as needed (FHA/VA/Conventional/Portfolio).
  • Track underwriting workload metrics and provide feedback on staffing needs, operational bottlenecks and training gaps to underwriting management.

Required Skills & Competencies

Hard Skills (Technical)

  • Proficient in Desktop Underwriter (DU), Loan Prospector / Loan Product Advisor (LP), Fannie/Freddie AUS workflows and GSE findings interpretation.
  • Strong knowledge of FHA TOTAL Scorecard, VA Lender Loan Eligibility and USDA underwriting requirements.
  • Expertise in credit analysis (translating credit reports to decisioning), including evaluating bankruptcies, foreclosures, collections, judgments and charge-offs.
  • Advanced income and asset analysis skills: tax returns (1040s, Schedules), profit & loss statements, bank statement analysis and verification of employment (VOE/VOE-IRS).
  • Experience reviewing and interpreting appraisal reports (1004, 2055, 1073, desktop/comparables) and assessing property condition and value risk.
  • Familiar with loan origination systems (LOS) such as Encompass, Calyx, Ellie Mae, MeridianLink and common CRM integrations.
  • Working knowledge of federal regulatory requirements (TILA/TRID, RESPA, ECOA, HMDA, HOEPA, QM/ATR) and investor documentation packages.
  • Proficient with Microsoft Excel for underwriting calculations, payrate amortization schedules, LTV/DTI analysis and basic data reconciliation.
  • Ability to prepare clear, auditable underwriting narratives and decision logs suitable for investor delivery and audit trails.
  • Familiarity with mortgage insurance requirements, rate/pricing impacts, and documentation for lender-paid scenarios.

Soft Skills

  • Exceptional attention to detail and strong organizational skills to manage multiple complex loan files simultaneously.
  • Clear and professional written and verbal communication with internal teams, external partners and borrowers.
  • Strong analytical and critical thinking skills with the ability to make decisive, risk-based underwriting decisions.
  • Time-management and prioritization skills to meet turnaround time SLAs in a high-volume environment.
  • Team player mentality with capability to train, mentor and provide constructive feedback to colleagues.
  • High level of integrity, ethics, and objectivity when assessing borrower eligibility and risk.
  • Adaptability to changing guidelines, investor overlays and regulatory updates.
  • Customer-focused approach to partnering with loan officers and processors to resolve conditions efficiently.
  • Problem-solving mindset with ability to propose pragmatic underwriting solutions and compensating factor justifications.
  • Ability to remain calm and effective under pressure during peak volume or escalated file situations.

Education & Experience

Educational Background

Minimum Education:

  • High school diploma or equivalent required; validated underwriting experience will be considered in lieu of formal degree.

Preferred Education:

  • Bachelor’s degree in Finance, Accounting, Business Administration, Economics or related field preferred.

Relevant Fields of Study:

  • Finance
  • Accounting
  • Business Administration
  • Economics
  • Real Estate / Mortgage Banking

Experience Requirements

Typical Experience Range: 2–7 years in residential mortgage underwriting, loan processing or related mortgage operations.

Preferred:

  • 3+ years of hands-on residential mortgage underwriting experience with demonstrated knowledge of AUS (DU/LP), FHA, VA, USDA and conventional product guidelines.
  • Experience with Encompass, Ellie Mae/Calyx or other LOS and strong track record meeting underwriting SLAs.
  • Prior exposure to quality control, investor delivery requirements and regulatory compliance for mortgage lending.
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