A quick guide to Mortgage underwriting services

Kensium BPO has an expert team specialized in Mortgage Underwriting Services reviewing all 4Cs (Credit, Capacity, Capital and Collateral) of underwriting.   Involving Kensium BPO for Mortgage Underwriting Services helps the clients to drive efficiency with reduced cost, at the same time enables the clients to increase their closing rate.

Credit review:

This is the process of reviewing the credit report of the borrower(s) and conditioning if any of the mandatory details are missing in credit report. Typically there are two types of credit review made in underwriting, Traditional and Non-traditional.  If there are less than 3 active trade lines in a credit report then we will proceed with Non-traditional credit where we review utility bills of the borrower as per the requirement.  If there are more than 3 active trade lines in credit report then we review it in traditional way.

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 as per the income mentioned by the borrower in initial 1003. Usually there are 3 kinds of income a borrower can receive, salaried income, self-employed income and rest other income.

 If a borrower is salaried, then we require paystubs of the current employer covering 30 days which might be of any pay frequency.  If it is Bi-weekly we require 2 consecutive paystubs, same for semimonthly, we require 4 paystubs if borrower is receiving weekly wages and 1 paystub is enough if the borrower is paid monthly.  Along with paystubs we also require most recent 2 years W2 to verify the continuity and also to calculate bonus and overtime if required.

If a borrower is self-employed, then we require most recent 2 years tax returns(1040) and business tax returns along with schedules as per the business the borrower is associated with.

If a borrower is receiving other incomes such as retirement (require – 1099R, retirement statement), child care (require- divorce decree or child support statement) or any other income we require the supporting documentation for the income mentioned by the borrower.

Asset review:

This is the process of reviewing asset documents of the borrower to verify the asset requirement as per DU/LP findings.  Most commonly used asset documents are bank statements in which we review for any large deposits made, sufficient asset available as per recent statement, access letter if required, transaction history of the borrower to identify is there any undisclosed debts. Other than bank statements we will consider retirement funds, investments, stocks and bonds and other asset documents like gift funds, DPA assistance etc.

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