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mfg98390
127 Posts |
 Posted - 05/18/2008 : 9:59:38 PM
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I have a Question About Delegated Underwriting VS Non Delegated UW
What is the Difference Between the 2 and how does this Apply to MI Contract Underwriters |
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ladysammm
352 Posts |
Posted - 05/18/2008 : 11:18:57 PM
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Delagated Underwriters have the signing authorization to approve up to a given dollar amount on behalf of the investor and or MI insurer. In other words an MI company can transfer the right to approve on their behalf to an approved employee at the lender level such as an underwriter and they would insure based on the decision of the underwriter.
Investors who are comfortable that an lender underwriter would adhere to their guidelines can delagate that person to approve or decline a loan that the investor would purchase without the investor having to review the loan a second time. |
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ladysammm
352 Posts |
Posted - 05/18/2008 : 11:22:08 PM
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| I meant to add that lenders who wish to contract out the underwriting process can sub-contact an underwriter from many of the MI companies. The underwriter would act on behalf of the lender adhering to the lencers speciific guidelines but not be employed directly by the lender. mostly used as an overflow. |
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peter
4613 Posts |
Posted - 05/18/2008 : 11:29:05 PM
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Delegated underwriting may limit a lender to one singe MI company, although
the process is quicker, while a non-delegated underwriter with a good file can
shop from several MI companies with different plans, i.e. monthly payment plan
with no upfront, upfront premium tagged onto the loan amount, etc. HSBC Wholesale
is non-delegated but they can get MI from any of the several MI companies according
to the plan the L/O would want to choose for his borrower when the LTV is over 80%
depending on whether his borrower wants to have the MI costs financed into the loan
or to have only the 1 month cost financed and to tag on a monthly M.I. The process
is not timeconsuming as MI companies these days need business too.
As for FHA, a DE (Direct Endorsement) FHA lender, is like the MI delegated
underwriter in conventional loans as FHA does insure the loan.
Peter |
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mfg98390
127 Posts |
Posted - 05/19/2008 : 10:56:58 PM
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Here is my Issue WA State Said this
http://www.dfi.wa.gov/cs/sb_6471_faq.htm
Non-delegated Correspondent – You close loans in your name with funds provided by a lender through a line of credit. The lender provides the underwriting criteria the borrower must meet and makes the final underwriting decision
What is So Veag about this is it doesnt state where the Actual UW is Placed at ie You can have MI UW's in your office but have them UW for the Investor you are selling to.
But that Also brings into Question What name do you put on the Approval ie Our Name or The Investors Name. |
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peter
4613 Posts |
Posted - 05/20/2008 : 10:34:10 AM
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Non-delegated correspondents can issue approvals in their
own names. Usually, you can spot that they are non-delegated
in that in their approvals they always have the last stip
that says "subject to final investor approval." The deed
of trust as well as the loan note, etc. will be executed in
the correspondent's name, but the first payment instruction
will say that the payment should be sent to the investor,
i.e. GMAC or Countrywide, etc. As a non-delegated correspondent,
you can hide your YSP as if you were a direct lender. Actually,
you are not but merely a proxy for your investor and you must
do concurrent closing. Funding can be in-house or can be
executed at the investor's funding department, i.e. GMAC or
Countrywide. However, the contractual agreement between the
investor and the correspondent may stipulate buyback clauses
etc. that are to the disadvantage of the correspondent. I used
to deal with this and it wasn't worth the extraneous risks and
the hassle while using the mortgage brokerage approach tapping
the best rates and programs from multiple lenders and doing
occasional loan switches to improve profit is a better way
of doing business with less costs and less risks.
Peter |
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