Pros and Cons of a Career in Mortgage Underwriting Management
Mortgage underwriters are responsible for deciding whether to approve an applicant for a mortgage loan, and determining the terms of the loan. Check out the pros and cons below to decide if being a mortgage underwriting manager is a good fit for you.
| PROS of a Mortgage Underwriting Management Career |
|---|
| High turnover in the underwriting industry creates job openings* |
| Leadership role that has the important duty of supervising trainees* |
| Underwriting managers may have occasional travel opportunities to attend meetings* |
| Satisfaction in helping people become homeowners** |
| Job offers a mix of working with people (as you manage your team) and working with numbers (as you analyze mortgage loan applications)* |
| CONS of a Mortgage Underwriting Management Career |
|---|
| High turnover due to limited options for advancement beyond manager positions* |
| Long hours, sometimes more than 40 per week* |
| Mortgage industry has a tarnished reputation after the Global Financial Crisis of the late 2000s*** |
| Frequent continuing education is needed since underwriting software programs are continually updated and government laws driving procedures change (for example, the S.A.F.E. Act of 2010 changed the regulation of mortgage licensing)**** |
| As software improves, the underwriter's duties can be increasingly automated, requiring fewer workers in the industry* |
Sources: *U.S. Bureau of Labor Statistics, **The National Association of Mortgage Brokers, ***The New York Times, ****Federal Financial Institutions Examination Council
Career Options and Salary Info
Mortgage underwriters - and thus mortgage underwriting managers - typically work for banks, credit unions or mortgage broker companies. These financial institutions came under close scrutiny during and after the late 2000s, and a federal Department of Housing and Urban Development (HUD) study published in 2008 found that Federal Housing Administration (FHA) mortgage loans that involved mortgage brokers cost homebuyers $300-$425 more than loans made by lenders such as banks (www.huduser.org). However, banks were also called into question when the subprime mortgage crisis of 2008 resulted in massive bailouts. Neither institution is 'better' than the other, but you may want to be aware of their histories and reputations, as well as consumer attitudes toward each, when choosing where you'd like to embark on your mortgage underwriting career.
Once you've become a manager, there are unfortunately few options for continued advancement. The BLS does note that senior manager jobs are available, but positions at that advanced level often require candidates to hold master's degrees.
Salary
As of March 2015, Salary.com reported that the national median salary for a mortgage underwriting manager was about $85,000; with bonuses, the median salary was close to $89,000. Salary.com also determined that most mortgage underwriting managers earned between $58,000 and $114,000 (without bonuses) in that same time period.
What Education and Training Do I Need?
To become a mortgage underwriting manager, you'll need to start out as a mortgage underwriter, which usually requires a bachelor's degree. There aren't any formal education requirements for a mortgage underwriting career, but the BLS states that employers, especially large ones, prefer candidates who hold 4-year degrees. Finance and business administration are the most desirable majors for aspiring mortgage underwriters, but any degree field coupled with courses in accounting, business law, insurance and computers can provide a sufficient background.
On-the-Job Training
Once you're hired, you'll continue learning on-the-job as a trainee or assistant, and a mortgage underwriting manager will direct your training. As you achieve proficiency with the institution's policies and procedures, you'll get to work with more complicated and higher-stakes mortgage applications. Your training period may last several months, or it may take a whole year, according to the BLS. Then, once you're a full-fledged mortgage underwriter, you'll want to accumulate a number of years of experience if you have designs on a promotion to manager. Based on job postings found on Monster.com in February 2012, other necessary qualifications for a managerial role include the following:
- Ability to monitor and evaluate team performance
- Strong written and verbal communication skills
- Excellent grasp of state and federal laws related to mortgages
- Ability to effectively train new employees
- Ability to manage a team's work while also underwriting some loans personally
Real Job Descriptions
Job postings for mortgage underwriting managers may request varying amounts of prior experience, depending on the level and responsibilities of the management position. Below are some examples of job ads from February 2012:
- A bank in Maryland sought a mortgage underwriting manager with 2-3 years of previous managerial experience. This manager would oversee underwriters who specialize in first or second residential mortgages.
- A lender in New York City, NY, advertised for a mortgage underwriting manager with 10-15 years of experience. This institution required applicants to be knowledgeable in underwriting co-op and condominium mortgage loans.
- A mortgage company in Utah looked for a mortgage underwriting manager with at least ten years of underwriting experience, including at least five years of management experience over a team of six or more underwriters. Proficiency in specific areas of mortgage underwriting, such as the Lender Appraisal Processing Program (LAPP), was required.
How to Stand Out from the Pack
If your goal in the mortgage underwriting field is to become a manager, it's highly advisable to earn a bachelor's degree. Finance and business are two majors that will prepare you for a mortgage underwriting career. You may want to seek programs that offer coursework in areas such as risk management, insurance and real estate management to gain some relevant background knowledge. Depending on your ambitions, you may also want to earn a master's degree in business or finance, since that level of education is often required for senior management jobs.
Specialize Your Skills
There are also particular mortgage lending systems with which you may want to gain familiarity. For example, LAPP helps lenders expedite loans for veterans by qualifying the lenders to process appraisals rather than waiting on the U.S. Department of Veterans Affairs to do so. The U.S. Department of Agriculture (USDA) also has a Rural Development office that provides loans to rural families through the American Recovery and Reinvestment Act of 2009. Lending that involves the Federal Housing Administration (FHA) has unique rules as well.
Employers may specifically seek out mortgage underwriting manager applicants who are proficient with LAPP, USDA, FHA or another lending system. You might gain these skills through continuing education classes offered by professional organizations in the mortgage industry, such as the National Association of Mortgage Brokers. Or, you might learn to work with some systems on-the-job as an underwriter.
Other Career Paths
If you're attracted to working in risk assessment and financial analysis , you might consider another area of insurance underwriting. Property and casualty insurance underwriting involves approving policies for things such as homes, cars, boats and even weddings. Life insurance and health insurance are two other areas that require underwriters.
Manager positions are needed in all of these fields. These types of underwriters typically work for insurance carriers rather than financial institutions like mortgage underwriters do, which can be a plus. The BLS states that insurance companies often provide notably good benefits to their employees, including (unsurprisingly!) financed life and health insurance plans.
Another option is to move away from analyzing loan or insurance applications into actually selling insurance policies and products. The possibility of sales bonuses for insurance agents can be an attractive one; as of May 2010, the BLS reported that the top ten percent of insurance agents earned about $115,000. An insurance agent job involves much more face-to-face contact with clients than a mortgage or insurance underwriter job, so this position may be more appealing to you if you're the outgoing, social type. Insurance agents can advance to managerial roles as well.
