Why upfront underwriting should matter to you
The speed still wows Tracy Wiese.
A 35-year mortgage industry veteran, Wiese was already familiar with the idea of upfront underwriting, in which lenders scrutinize a mortgage loan and assess a borrower's credit risk before they start looking at houses.
But when she joined Movement Mortgage two years ago, she found something unprecedented — a goal for underwriters to render a loan decision within six hours of a file landing on their desk.
"There's not a lot of lenders out there that can move that quickly," says Wiese, who manages just over 50 underwriters at Movement's National Sales Support Center in Fort Mill, S.C. "Our whole entire process is a lot smoother than any other lender I've worked for."
That process has catapulted Movement to the fore of national attention as a mortgage lender using money and resources to ensure customers understand what they can afford and how much they're approved to borrow at the very beginning of their home search.
At traditional banks and lending institutions, underwriters may not touch a loan application for 45 to 60 days, usually after a would-be homeowner has found a home they believe they can afford.
That system often frustrates borrowers and real estate agents with last-minute delays and snafus that made home-buying tedious, arduous and stressful.
When they founded Movement in 2008, co-founders Casey Crawford and Toby Harris pledged to evade setbacks in the financing stage by placing underwriting at the front of the process.
Today, Movement aims to lend responsibly to borrowers by underwriting their credit first, letting them know just how much home they can afford before they start shopping.
"Oftentimes (buyers) were getting pre-qualifications from lenders and then we were finding as we got closer to the closing date that those prequalifications really weren't working," Crawford recently told mortgage giant Fannie Mae. "They really hadn't truly underwritten the borrower. They had just done a really cursory pre-qual."
He added: "And then we would get into the process, and they would start to pull credit documents and find out that there was some problem with the loan, and we wouldn't be able to close by the date of closing."
That's why Movement is different.
In our mission to love and value people, we underwrite loans at the onset of the loan process so borrowers aren't caught by surprise when they're ready to sign the dotted line. It makes the process easier and faster, and adds a layer of transparency and assurance that's hard to find at other lenders, says Josh Klemmer, a Movement market leader in Richmond, Va.
So why don't other big-name lenders do it?
It's expensive, Klemmer says. Underwriters are among the highest-paid employees at lending institutions. If an underwriter reviews a file only once, "you're saving money," he says.
However, Movement underwriters may review a single file at least three times before it moves to closing, Klemmer says.
"Not only are we going to do your underwriting upfront, we'll do it without a property," he says. "You're not going to run the risk of going out, thinking you qualify for a five-bedroom home and then I tell you can only afford a four-bedroom home."
