10+ Senior Underwriter Interview Questions and Answers

Assets are considered differently based on their liquidity and volatility.

• IRA assets are considered less liquid and more stable, hence 60% is considered

• Stocks are more volatile and hence only 70% is considered

• Large deposit definition varies based on the bank's policy

• This approach helps in assessing the risk associated with different types of assets

Appraisal form numbers for property types

• Single Family Residence: Form 1004

• Condominium: Form 1073

• Multi-Family: Form 1025

• Vacant Land: Form 1004

• Commercial: Form 1007

• Industrial: Form 1007

• Mixed-Use: Form 1025

• Special Purpose: Form 1007

Fannie and Freddie have implemented flexible guidelines due to Co-vid.

• Fannie and Freddie have allowed for alternative appraisals and employment verifications.

• Borrowers can now defer payments for up to 12 months.

• There are also options for forbearance and loan modifications.

• These guidelines are subject to change as the situation with Co-vid evolves.

Tax return schedules are detailed forms that show specific line items of income, deductions, and credits.

• Tax return schedules are used to report specific types of income or deductions, such as rental income or self-employment tax.

• They are attached to the main tax return form, such as Form 1040, and provide additional detail.

• Examples of tax return schedules include Schedule C for self-employment income, Schedule E for rental income, and Schedule A for itemized deductions.

• Line ...read more

Community distance check in purchase file is a process to verify the proximity of a property to community amenities.

• Verify distance to schools, hospitals, grocery stores, etc.

• Ensure property meets community requirements for distance to amenities.

• Check if property is within a certain radius of community facilities.

• Use mapping tools to confirm proximity to community resources.

Live underwriting process involves real-time assessment of risk factors during the application process.

• Real-time evaluation of applicant's information

• Immediate decision-making based on risk factors

• Utilization of technology for quick analysis

• Direct interaction with applicants for additional information

• Examples: online insurance applications with instant approval or denial

Income calculations for business involve analyzing financial documents to determine the company's revenue and expenses.

• Review profit and loss statements to assess income and expenses

• Calculate gross income by subtracting cost of goods sold from total revenue

• Consider non-operating income such as investments or interest

• Evaluate cash flow to determine the company's ability to meet financial obligations

The 4 Cs refer to the key factors that lenders consider when evaluating a borrower's creditworthiness.

• The 4 Cs are Character, Capacity, Capital, and Collateral.

• Character refers to the borrower's reputation and credit history.

• Capacity refers to the borrower's ability to repay the loan.

• Capital refers to the borrower's financial resources and assets.

• Collateral refers to the borrower's assets that can be used as security for the loan.

• Lenders use the 4 Cs to assess the risk of len...read more

Credit risk is the risk of loss due to a borrower's failure to repay a loan or meet contractual obligations.

• Credit risk is the risk that a borrower will default on a loan or debt obligation.

• It is the potential loss that a lender may suffer if a borrower fails to make payments.

• Factors that contribute to credit risk include the borrower's credit history, financial stability, and economic conditions.

• Lenders use credit scores and credit reports to assess credit risk before lendin...read more

Types of income include earned income, passive income, and portfolio income.

• Earned income is income earned through employment, such as salaries, wages, and bonuses.

• Passive income is income generated from rental properties, limited partnerships, or other enterprises in which the individual is not actively involved.

• Portfolio income is income from investments, such as dividends, interest, and capital gains.