False! An underwriter’s job is not to decline loans — it’s to help find a way to approve the loan while staying within the lending guidelines. Every decline has to be audited and reviewed by a manager, and if there’s even a possible counter-offer the underwriter is required to propose it. Declines are scrutinized much more than approvals, so underwriters work hard to find compliant solutions rather than turning borrowers away unnecessarily.

All of the Above! Loans are audited for several reasons — some are selected randomly as part of quality control, others because of high-risk indicators in the file that warrant a closer look, and some because the underwriter themselves is under periodic review. Certain underwriters may be audited more frequently based on their experience level, performance metrics, or prior findings. All of these ensure compliance and protect both the lender and the borrower.

This is True. While the standard guideline is that overtime income should be averaged over a 2-year history, underwriters can consider overtime with at least 12 months of documented, consistent earnings — if the likelihood of continuation is reasonable and the income is stable. The underwriter must document why it’s appropriate and explain any upward or downward trends. This is considered a compensating factor and must align with the investor’s guidelines.

No. In fact, most loan officers come into the industry through sales and never develop the in‑depth knowledge of guidelines and risk analysis that underwriters gain through years at the desk. Underwriters tend to have advanced problem‑solving skills, an ability to juggle complex details, and a deep understanding of how to actually structure a loan — all of which would make them excellent LOs. But the reality is that most underwriters prefer the quiet of their desk and to be left alone rather than interact with customers.

This is True! USDA does allow a gym membership to count as a non-traditional credit tradeline — provided it shows a consistent, timely 12‑month payment history and is verifiable. Like other acceptable alternative tradelines (rent, insurance, utilities), the gym membership must demonstrate the borrower’s willingness to repay recurring obligations. Not all lenders may recognize it immediately, but USDA guidance has expanded to include it when properly documented.

False. The underwriter does not generate the final Closing Disclosure (CD). The CD is prepared by the lender’s closing department, who works closely with the title company or settlement agent to reconcile all fees, taxes, and credits. The underwriter’s job is to clear conditions and approve the loan — but the closing department and title company handle the preparation and delivery of the CD, ensuring that all costs are accurate and compliant before the borrower signs.

Of course this is true! A good underwriter works closely with both the loan officer (sales) and the processor throughout the loan process. The processor gathers and organizes documentation, the sales team communicates with the borrower, and the underwriter reviews everything to ensure it meets guidelines. Open communication among all three helps avoid delays, resolve conditions quickly, and keep the loan moving smoothly toward closing. Collaboration between these roles is essential to providing great service and getting loans funded efficiently.

This is not Factual. A Direct Endorsement (DE) authority is required to fully underwrite and insure FHA loans, not VA loans. The DE underwriter reviews and approves the entire FHA loan file on behalf of HUD.
For VA loans, the underwriter reviews most of the file as usual, but only the appraisal portion requires a VA‑approved Staff Appraisal Reviewer (SAR). The SAR is specifically responsible for reviewing and approving the Notice of Value (NOV) and ensuring the appraisal meets VA guidelines, while the rest of the file is handled by a qualified underwriter — no DE required.

False here. While underwriters are expected to be highly accurate and thorough, perfection is not realistic. A typical acceptable accuracy rate in the industry is around 95% or higher, acknowledging that occasional minor errors happen and are caught during audits. However, consistent errors, especially those that result in compliance issues or financial losses, can lead to retraining, probation, or even termination. Underwriters are trusted to minimize mistakes and continuously improve.

Not True. While underwriters typically work standard business hours, many — especially in busy markets or competitive environments — work late nights, weekends, and even holidays to meet deadlines and help get deals closed. Underwriters are often under pressure to clear conditions and issue decisions quickly, and dedicated professionals will go the extra mile when needed. Just because they’re not client-facing doesn’t mean they aren’t working hard behind the scenes.