Automation & technology

Breaking down the barriers of underwriting


As an industry, we’re committed to faster closings of higher quality originations. With the average closing time of 48 days on purchase loans, and underwriting varying from a few days to a couple of weeks, reducing submission to clear to close times is a critical way to streamline the origination process and improve the borrower experience. I was recently honored to lead a breakout session at Experience 2022 in Las Vegas, where we heard directly from lenders about the ways they address and overcome underwriting challenges through best practices and technology. I was joined by over 100 enthusiastic lenders, and my esteemed co-host, Suzy Lindblom, Chief Operations Officer of First Guaranty Mortgage Corporation (FGMC). A bona-fide industry rock star, Suzy is an award-winning leader and expert in operations, managing risk, loss mitigation, underwriting, project management, post-closing, and compliance. She is known for her ability to develop process efficiencies and identify areas for potential cost savings, while increasing customer service levels and loan quality.

Breaking into small groups, we asked lenders about key factors impacting various underwriting scenarios. Discussions covered a broad range of topics, including pain points, operations, underwriting, processing, loan products, technology, sales, and Encompass®-related best practices. These conversations were incredibly engaging, and probably would have continued late into the evening had we not cut the time short to bring the entire group back together.

Common themes impacting underwriters and clear to close times

Here’s a snapshot of how Encompass customers viewed underwriting roadblocks:

  • Documentation issues were called out by over 50% of the group, and included the tedious consequences of incomplete files, missing documents, repetitive manual reviews, and the need for consistent document indexing.
  • The challenges of balancing investor and QC requirements with customer expectations were also called out. This is driven by the desire to maintain underwriter reputations, performance, and compliance with investors and QC, all while meeting customer demand for quick approvals in a highly competitive real estate market.
  • Communications, and the challenges of such, were also top of mind. Underwriters currently spend a lot of time responding to inquiries about loan scenarios or providing estimates on loan status, all of which take time from underwriting and lengthens the review process.
  • The shortage of experienced processors and underwriters is also a common issue. The disruption of losing experienced staff to retirement or competitors, or balancing processors between assisting loan originators and completing pre-underwriting duties, shifts valuable hours from the processor to the underwriter impacting the underwriting process.
  • The manual nature of reviewing files and documents often results in re-work, multiple touchpoints and recalculations

Tips for overcoming underwriting barriers

With all that said, getting experts in a room provided a collaborative environment where we were able to identify some valuable solutions and approaches. Here are some key takeaways from the conversation:

  • Training - Re-visit training frequently to ensure that loan officers and processors always have clarity about what is required on a loan, before it is sent to underwriting. For example, one lender recommended going back to the basics and conducting training on the roles of processors versus underwriters, and related best practices.
  • Consistent communications - Incorporate a regular communication cadence with all relevant parties, and use that time to provide comprehensive status updates. This will help avoid constant texts, emails, and calls throughout the day. For example, one lender found success in conducting a daily meeting with loan officers, processors, and underwriters to review their pipeline and identify loan status issues, prioritizations, and daily needs.
  • Embrace technology - There are many ways to customize technology to your exact workflow. For example, you can set up rules to manage conditions clearing, loan statuses, and document updates. Lenders find that technology such as ICE Data and Document Automation and ICE Mortgage Analyzers can also help automatically identify and index documents as well as analyzing extracted data against advanced rule sets to automate parts of the underwriting process.

Taking the next step

The insights gained from this session and lender networking were incredibly valuable, as ICE Mortgage Technology continues to work with lenders to build and improve solutions that lead the way in automating everything automatable in the mortgage industry. Our technology is making a positive difference for lenders of all sizes, and I invite you to experience a free demo at your convenience.

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