RC_LP_U_200.5 Collateral Review in Residential Underwriting

In mortgage lending, the appraisal is an important document that enables the underwriter to decide whether the property offers sufficient collateral for the loan amount being requested. If a borrower defaults on a mortgage loan, the investor or lender who owns the mortgage may foreclose on the property and sell it to recapture the investment. If the value of the property is less than the amount owed on the loan, the lending institution or investor suffers a loss. Even though it is impossible to predict future market conditions, a thorough appraisal of the property, neighborhood, and overall market at the time of loan origination can help the lender assess the risk associated with a particular piece of property.

Underwriting and reviewing appraisals thoroughly is a detailed and often complex procedure. Collateral Review in Residential Underwriting provides a foundation that will help a new underwriter begin to understand the intricacies of appraisal review. The course begins with a look at the use of appraisals in mortgage lending. Next, lender responsibilities related to appraisals are described. Appraisal documentation, including required forms and exhibits, are then addressed. The course then explains the methods of determining value. Toward the end of the course, underwriting considerations for various areas of the appraisal are presented.

This is a single-family/residential course.