Essentials of Residential Underwriting is designed to present an overview of the underwriting process and the underwriter's responsibilities in the process. The role of an underwriter has always been to decide whether making a particular loan is a prudent investment. Over the last two decades, this role has been modified and has increased as the mortgage lending industry has changed. What was perhaps a 'rubber stamp' job is now one of the most highly regarded positions in a mortgage banking firm. Students will study basic components of the underwriting process and the role of the underwriter in the process; types of real estate transactions; key components in evaluating applicants for a residential mortgage; credit and debt, funds, and income analysis and documentation; basics of property appraisals; the alternatives available when an underwriting decision is reached; and the impact on underwriting of trends in the mortgage industry.

Course Outline:

Lesson 1 - Underwriting Basics

• Evolution of Underwriting
• Role of the Underwriter
• How Underwriting Works
• Impact of Regulations

Lesson 2 - New Purchase and Refinance Transactions

• Underwriting New Purchase Transactions
• Underwriting Refinance Transactions

Lesson 3 - The Four Cs of Underwriting Analysis

• Credit Analysis (Character)
• Income analysis (Capacity)
• Funds Analysis (Capital)
• Property Appraisal (Collateral)
• Fraud Analysis in the 4 Cs

Lesson 4 - Loan Disposition and Underwriting Trends

• Loan Disposition
• Loan Transmittal
• Trends in Underwriting

Course Credit:
Completion of this course earns five points toward MBA's Certified Mortgage Banker (CMB), or Certified Mortgage Technologist (CMT) designations. This course also earns five points towards MBA's Quality Assurance (CQAP Level I) or Residential Underwriter (CRU Level I) Achievement Certificate programs.