An FHA Direct Endorsement (DE) Underwriter is responsible for underwriting guidelines issued by FHA and interpreting investor guidelines to make the credit decision.
Tools like the FHA TOTAL Scorecard are essential resources but do not replace understanding risk layering, interpreting the guidelines and critical decision-making skills.
Steps for DE Underwriter Eligibility from FHA's 4000.1 I.B.3.b.
- 3 or more years full-time experience reviewing credit applications and 1-4 unit property appraisals, within the past 5 years OR
- At least 2 years full-time experience reviewing credit applications and 1-4 unit property appraisals, within the past 3 years combined with an additional 3 years of such full-time employment in the past ten years AND
- Be a full-time employee of a single lender AND be authorized to bind the lender in matters involved in origination or mortgages
Go to: https://diehleducation.com/mortgage-skills
How to Become an FHA Underwriter
FHA Direct Endorsement (DE) underwriters underwrite both the borrower and the property. According to Zip Recruiter, FHA DE Underwriters make an average of $10,532 per year more than underwriters with only conventional loan experience.
Although Technology Open To Approved Lenders (TOTAL) Mortgage Scorecard approvals do not require a DE underwriter’s review, most lenders do require the review to be done by a DE underwriter. There are several occasions when an FHA loan must be manually underwritten, and only a DE underwriter can preform that function. Appraisals must always be underwritten by a DE underwriter, regardless of whether the loan was manually underwritten or underwritten utilizing TOTAL Scorecard.
When an FHA approved lender registers an underwriter in FHA Connection, they are certifying that the underwriter meets certain qualifications.
First of all, the underwriter must have a minimum of three years full-time experience reviewing credit applications and one- to four-unit property appraisals, within the past five years; or,
have a minimum of two years full-time experience reviewing credit applications and one- to four-unit property appraisals, within the past three years, combined with an additional three years of such full-time experience within the past ten years. Underwriting experience can be in conventional, VA or USDA loans.
The underwriter must be a full-time employee of only one lender and may not be a contract underwriter.
There are also requirements regarding the underwriter’s integrity, such as convictions, investigations, suspensions, violations, irresponsible actions, and disbarments.
The lender must certify that the underwriter is authorized to bind the lender in matters involving origination of mortgages. Because of this authority to bind the lender, it is very important that a DE underwriter is property trained. That’s where Diehl Mortgage Training and Compliance can help. Our FHA Underwriting and Processing Course is available in 3 different formats: online self-study, live webinar or live in-person.