As mortgage lenders look for ways to reduce costs and improve efficiency, outsourcing underwriting has become an increasingly attractive option. Underwriters are highly compensated professionals, and outsourcing can provide not only cost certainty but also business continuity during fluctuating loan volumes. However, before entering into a contract with an outsourcing provider, its essential to consider several key factors to ensure you’re making the right decision for your business.

Key Considerations

• Location of Work: Is the underwriting performed offshore? If so, are there potential language or
  communication barriers that could impact efficiency and accuracy?
• Licensing and Compliance: Is the outsourcing company properly licensed? If not, how much of
  the work will require internal staff review and approval?
• Dedicated Underwriters: Will the company assign dedicated underwriters to your account?
  Having a consistent team can help build strong relationships and ensure seamless communication.
• Accessibility and Expertise: Are the underwriters available to you when needed? Can they assist
  in structuring loans or suggest alternative loan programs?
• Investor-Specific Underwriting: Does the outsourcing company tailor its underwriting reviews
  to specific investors? Can you incorporate your own overlays?
• Quality Assurance and Warranty: Does the company offer any type of warranty on its work?
  How does it handle underwriting errors?
• Support for Rebuttals and Workouts: Will the company assist in rebuttals or work through
  solutions in the case of a repurchase demand?
• Income Calculation Methodology: How does the company calculate self-employed income and
  handle fluctuating income scenarios?
• Error Ratio and Performance Metrics: What is the company’s error ratio? Have they provided
  transparency in their quality control processes?

Making the Right Choice

If an outsourcing provider cannot confidently address these questions, it may be worth exploring other
options. The right partner should not only meet your cost and efficiency goals but also provide the
reliability, accessibility, and expertise required to uphold underwriting quality. Taking the time to
evaluate multiple providers will ensure you select one that aligns with your business needs and
standards.

By carefully considering these factors, you can make an informed decision that enhances operational
efficiency without compromising loan quality or compliance.