Demystifying the Underwriter

Interview with Underwriter Lindsey Kuhnle

When it comes to underwriters, we at VanDyk Mortgage have heard it all. For many folks, the underwriter seems like a shadowy figure, sitting in a dark room and asking for whatever annoying thing pops into their head from the borrower. Luckily, as we showed when we sat down for a Facebook interview with the VanDyk Mortgage head underwriting manager, Lindsey Kuhnle, that’s not how it really is.

First off, of course, there was the question on everybody’s mind: What does an underwriter do?

“We take your loans from the loan officers, and we evaluate the risk thresholds behind them,” Lindsey says, “We do have automated services that run findings on all of our loans to give us a basis on where to start. From there, we’re looking at the borrower’s income, credit, assets, all of that to really make sure we are doing good, quality loans.”

Lindsey’s job is to take those key metrics — credit report, assets, etc. — and match them up with the loan program guidelines that particular loan falls under. But “A guideline is a guideline,” Lindsey says. “Our automated findings are recommendations. So, on top of those, we’re really looking at the documentation that has been provided to us, to make sure that we’re asking the right questions, that we’re getting the right information. Stuff like ‘Where did that large deposit come from on the bank statement?’”

What most people don’t realize that if an underwriter isn’t thorough or makes a bunch of errors, a bad loan can close. Later on down the road, if the loan forecloses or gets randomly audited (which does happen!), it can spell disaster for the not only the borrower, but the underwriter and the mortgage lender as well. After all, they’re held accountable for their errors by the powers that be.

“When we get into more of the government programs, where we have those certifications, those kinds of errors can impact those certifications,” Lindsey says. “That is, at times, why you may think us underwriters are a little crazy in what we’re asking for from the get-go. It really is to avoid those closing problems and to protect our credibility and key certifications.” Post-closing issues can get extremely costly for a company, and fast.

But what’s the hardest part of Lindsey’s job?

“The hardest part, I think, is having to say no. We are emotional beings, and in some situations where we have to say no, there’s that single mom with four kids on the other end — that’s devastating!” Lindsey says. “I will say that I’m thankful to work with a group of people who are open-minded. We try not to say no often, and sometimes it’s just a matter of ‘No, now’s not the right time.’ Give this borrower another six months, give this borrower another year, have them come back, let’s look at it again.”

“We want to be the company that does things for our borrowers, and not to our borrowers … We want to be a part of their success story,” she says. “Unfortunately, as an underwriter, we at times have to say no, but the basis of our job is protecting not just our company, but also those borrowers as well.”

I can say from working with the VanDyk underwriters that they definitely go above and beyond to help us and our clients. Many people struggle to understand just how many moving parts there are to a loan, and how difficult it is to get them to align perfectly before closing. For underwriters, that’s their bread and butter.

But of course, I couldn’t let Lindsey go without asking for a piece of advice she’d give to a realtor in order to facilitate a smooth transaction.

“I think the biggest thing is setting the right expectations and communicating,” Lindsey says. “Through this role especially, I’ve really realized how important communication is in this whole process from start to finish. Making those connections between the borrowers, your loan officers, and every other piece of the puzzle is essential in order to meet the client’s expectations. And if for some reason you can’t meet those expectations, you need to explain why and lay out the steps to getting there.”

Wise words from a wise woman. Clearly, with a little knowledge, underwriters don’t have to be a big scary boogeyman for borrowers. I learned a lot from my interview with Lindsey Kuhnle, and I’m sure any prospective buyers will too. Check out the whole thing on “The HartBeat Show” podcast, or on my page “Tim Hart – Loan Officer” on Facebook!