Differences Between an Underwriter & a Processor

Loan underwriters and processors are key players in the process of evaluating and approving loans and distributing their proceeds. After a loan application is completed and submitted, the loan processor reviews the loan application and attached documentation for completeness and accuracy. A loan underwriter evaluates the information on a loan application against various lending standards to determine if the applicant should receive the loan amount requested.

Loan Processing Responsibilities

A loan processor organizes the loan application’s documentation and makes sure it’s in order before the underwriter reviews the loan file, according to Lending Tree. The processor typically contacts the borrower if information is missing or if additional information or documentation is required. She must review the documents received and determine if they comply with the lender’s standards. A loan processor’s responsibilities are less rigorous than the underwriter’s because the processor does not decide on loan approval. Her review for completeness and accuracy of the loan file makes the underwriter’s job easier.

Processor Job Requirements

The job requirements to become a loan processor are less extensive than those for an underwriter. Good organizational skills are necessary to handle the substantial amount of documentation that makes up a loan file. Educational requirements include a high school diploma, but a college degree is not necessary. Many lenders and banks also train loan processors on applicable internal and external guidelines and procedures.

Loan Underwriting Responsibilities

A loan underwriter’s job responsibilities include performing a detailed credit analysis of a borrower. The underwriter looks at a borrower’s employment record, income sources and credit report, according to Rocket Mortgage. A borrower’s credit score, the amount of debt he carries and his payment history are other critical pieces of information an underwriter also considers. An underwriter determines if a borrower’s financial ratios, such as debt-to-income ratio, meet the bank’s lending standards. For collateral loans, the underwriter is responsible for evaluating the condition of the asset and determining that the borrower has or will get good title to the asset.

Underwriter Job Requirements

Various job requirements need to be met to work as an underwriter. First and foremost, an underwriter must be a person with an attention for financial details and be able to understand established lending requirements. Familiarity with federal and industry standards and the ability to apply them on a case-by-case basis is also necessary. An underwriter must also be extremely analytical, be able to evaluate the financial information presented to her and demonstrate some flexibility in applying lending criteria.

The job also requires a person who is a team player, has effective communication skills and excellent customer service skills. Loan underwriters often have bachelor's degrees in business or finance or related areas, although this is not a rigid requirement. Mortgage loan underwriters must also be licensed. When it comes to mortgage loan processor vs. underwriter salary, an underwriter usually makes more due to a more involved and consequential responsibility.

There are a lot of terms that aren't necessarily interchangeable in the loan process. A loan officer (vs. underwriter) helps the client choose the right loan product for them. A loan officer vs. loan processor may often be confused but it is helpful to know the difference.