A Quick Guide to Mortgage Underwriting Services

January 10, 2020

247Digitize has an expert team specialized in Mortgage Underwriting Services reviewing the 4Cs (Credit, Capacity, Capital and Collateral) of underwriting. Leveraging 247Digitize for Mortgage Underwriting Services helps our clients drive cost efficiency through reduced overhead, at the same time enabling them to increase their closing rate by focusing on sales.

Credit Review

This is the process of reviewing the credit report for the borrower and conditioning if any of the mandatory details are missing in the credit report. Typically, there are two types of credit reviews made in Underwriting: Traditional and Non-traditional. Traditional reviews are conducted where there are 3 active trade lines. If less than 3 are provided on the borrower’s credit report, 247Digitize will proceed with a Non-traditional credit review analyzing the utility bills of the borrower per the requirement.

Income review

This is the process of reviewing income documents from the borrower such as paystubs, W2’s for salaried, tax returns for self-employed borrowers, and other required documents verifying the income mentioned by the borrower in the Loan Application. Typically, there are 3 types of income a borrower can receive: salaried income, self-employed income and supplemental/other income.

If the borrower is salaried, then we require paystubs of the current employer covering 30 days which could be of any pay frequency. If the borrower is paid bi-weekly or semi-monthly, we require 2 consecutive paystubs. 4 paystubs are required if a borrower is receiving weekly wages and 1 is sufficient if they are paid monthly. In addition to the paystubs, we also require W2 forms for the 2 most recent years to verify employment continuity and to calculate bonus and overtime compensation potential if applicable.

If a borrower is self-employed, we require the 2 most recent tax returns (Form 1040) and business tax returns along with schedules pertaining to the business for which the borrower is associated.

If a borrower is receiving other supplemental income such as retirement benefits (Form 1099R required) child care assistance (divorce decree or child support statement required) or any other income, supporting documentation must be provided by the borrower to verify all incoming funds.

Asset review

This is the process of reviewing asset documents of the borrower to verify they meet all asset requirements per DU/LP findings. The most commonly used asset documents are bank statements. Here, we review any large deposits, ensure sufficient assets are available per their most recent statement(s), secure an access letter if required, and thoroughly review the transaction history of the borrower to identify if there are any undisclosed debts. Beyond bank statements, investment equity in the form of retirement funds, trusts, stocks and bonds and other assets such as gifts and DPA assistance are considered in this review.