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Outsourcing Underwriting Can Help Your Firm Grow

Many companies today are outsourcing the burden of underwriting small mortgage loans. There are many startup mortgage processing companies that do not have the capital necessary to hire experienced underwriters. It takes many years to perfect the role of the underwriter. For that reason, most underwriters that have the necessary experience to fill the role demand a salary that is out of reach of the typical startup company.

In order to compete and survive in the mortgage lending industry, a small business must have many experienced underwriters on staff. When you stop and realize that the firm must also employ loan officers to take the applications, and processors to make sure everything is completed accurately and packaged in a timely manner, the thought of hiring multiple underwriters may seem like an impossible achievement.

The Need for a Safety Net

Realizing that they needed some sort of safety net during times when things were hard economically, the smaller business began outsourcing the underwriting. This is something that you should consider, if you are not already doing it, and you own or manage a small mortgage processing company. To be frank, the mortgage industry is unpredictable. Radical changes can happen almost instantly, and you have to be prepared to meet any challenge that might pop up without you realizing it quick enough.

One way to help your company survive these rapid changes is to make sure that you always have adequate staffing during both peak and dry periods. You probably already know that things can come to a grinding halt with no notice. One day it seems like there is no end to the work that needs to be done, and by the end of the week, there is nothing new coming into the office.

A company survives the dry spells by closing as many loans as can be brought into the office in the shortest time, and of course, at the lowest cost possible. When you outsource the underwriting, owners of the smaller companies and those just starting up can meet the goals that have been set, keeping their company alive.

How Outsourcing Works

The outsourcing arrangement is simple. You must search through the many underwriters that are out there, and choose those that you feel are most trustworthy and experienced, of those who outsource their services. Take note that there are many offshore companies that are based outside of the United States, and you should rarely choose one of them, keeping the underwriting within the US borders. The way to choose a reliable underwriter is to start by looking at those companies that have a physical place of business and not just a virtual presence.

Next, when you are looking for an outsourced underwriter, choosing one that is within the US ensures that you are working with a company that is most likely to be following the rules and laws of the United States, and that privacy is strictly adhered to. Housing laws in the United States are strictly followed, and you want to make sure that the underwriter is adhering to them as well.

Most companies that are in business are using the internet to find their target client. This can give your company a national presence, and help with growth while outsourcing the underwriting to save money that would otherwise be paid to high salaries. Do not lose focus however, and just hire any underwriter, in the interest of getting deals closed quickly. While a fast close is definitely important, you don’t want to put your company at risk just for the sake of saying that you closed the deal.

The bottom line is that you can outsource those underwriting deals, and use the savings to grow your company until you reach a point where you are able to employ as many experienced underwriter as you need within your firm.

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