How to Choose a Professional and Reliable Underwriting Service Provider ?

When it comes to choosing a professional and reliable underwriting service provider, you want to take your time and do your due diligence. Not all underwriting service providers stay up to date on federal regulations, utilize the latest technology, or have experts on staff to expedite the underwriting process.


What is an underwriting service provider?


An underwriting service provider is a third party company who takes on the tasks of a traditional lending system underwriters. It is the underwriting service provider's job to determine if the borrower and property are worthy of borrowing money from the lending institution and repaying the loan.


What does an Underwriting Service Provider do?


The underwriting service provider will determine the creditworthiness of the borrower, the collateral of the property, and the capacity of the borrower and property to pay back the loan. A professional and reliable underwriting service provider will have a staff of experts in real estate analysis, and underwriting examines the loan application and all required documentation to decide if the borrower or group is approved to borrow money. The underwriting service provider will also scrutinize the ability of the property to pay for debt servicing. The third step is to determine if the borrowers have enough equity and dry power available to pay the loan themselves if the property hits hard times.


How to choose a professional and reliable underwriting service provider?


When searching for a professional underwriting service provider, you want to learn about their underwriting experience.


Here are some questions to help you determine if an underwriting service provider is professional and reliable:


  • Have they helped many clients with their underwriting needs, or are they new on the scene? Not that a new underwriting service provider can't have professionals on staff, but do they advertise the knowledge base their experts have to serve their clients better?


When an underwriting service provider has reliable experts on staff, they stay on top of all the new commercial real estate mortgages and underwriting regulations. If not, you may want to keep looking for an underwriting service provider who has a proven track record.


  • Do the underwriting service provider's clients stick with them for an extended period or jump ship? If you can speak to previous clients, you want to ask how they feel the service is with that underwriting service provider.


Questions to ask an underwriting service provider's clients:


· Was the underwriting service provider helpful in answering any questions?


· Did the underwriting service provider make the process as easy as it could be?


· Would they use or have they used that underwriting service provider more than once?


Longevity with businesses is hard to find. If clients are happy and are champions for the underwriting service provider they are using, you may want to join them. Repeat business means the underwriting service provider is providing the client with excellent customer service, which can be hard to find.


  • Does the underwriting service provider have expert analysts and underwriters on staff, or are they solely relying on technology to fill in the gaps? Technology makes the underwriting process go much faster, minutes instead of weeks, and with no errors compared to manual underwriting.


However, if the underwriters don't have experience analyzing the data from the automated underwriting system, you are back at square one. Professional and reliable underwriting service providers will utilize a combination of manual and automated underwriting to provide the best service to their clients.


  • What technology does an underwriting service provider utilize?


Not all professional underwriting service providers utilize automated underwriting in their process. While manual underwriting is being used in-house by many lenders, utilizing automated underwriting at the same time can help speed up the process and eliminate errors. If your service provider does not have automated underwriting as a tool in their toolbox, you may want to find one who does.


As you search for a professional and reliable underwriting service provider, ask these questions, and consider the Clik Servicing Hub. As an underwriting service provider, our commercial real estate analysts are experts in automated underwriting, CRE lease abstraction, lease audits, financial modeling, and much more.