Underwriters - bridging finance's underlying force

Underwriters - bridging finance's underlying force


Following on from our ‘what makes a good bridging BDM’ feature we felt that we needed to find out more about other vital roles within the industry, including the position of the underwriter. Bridging & Commercial, once again, asked industry experts what characteristics they believe make up a good bridging underwriter.

Speaking about the value of underwriters for a lender, Steve Nicholas, Chief Executive at Tiuta, explained: “Underwriting is the backbone of any lending organisation; they are in effect our goalkeepers. The value of a proficient underwriter cannot be overstated; if they get it wrong then the consequences that flow can be horrendous. The greatest consequence can be the failure of the loan and action for recovery.  It is for this reason that quality underwriters will always be in demand.”

Mark Posniak, Head of Marketing & Operations at Dragonfly Finance, agreed. “A good underwriter is hugely important for our organisation, for any bridging lender and indeed for any mainstream lender. The difference between making money and losing money is often down to how good the underwriters are,” he said.

Gavin Diamond, Finance Director at Cheval, told us, “Underwriters are obviously invaluable in our business. It is vitally important that they understand the deal presented and ask relevant questions to get the required level of comfort to progress the deal.

“Their ability to maintain a good rapport with the introducer and/or borrower and manage their expectations is also an essential part of their role.

“Naturally, the ability to quickly pick up on the key elements of any deal and work to tight deadlines are important characteristics for any bridging underwriter.”

Brian Levin, Underwriting and Operations Manager at Masthaven, thinks: “Underwriters are an integral part of our business and the industry. In my mind, it is one of the toughest jobs within the industry.

“Underwriters are responsible for making sure all aspects of a bridge are thoroughly investigated and underwritten to ensure that the correct lending decision is made. At the same time, they need to actas quickly as possible to effect quick completions and keep our clients and brokers happy. There is no room for an underwriter to make any errors as even getting nine out of ten lending decisions correct is not good enough.”

To get the recruiter’s angle on what characteristics are needed to be a good underwriter, Peter Gwilliam, Owner of Virtus Search, explained that a good underwriter “must be able to communicate effectively at all levels and explain their rationale, since typically there are stakeholders pulling in opposite directions, e.g. sales and brokers wanting to make the deal happen (and quickly) and risk/compliance needing rigour and robustness to be applied to the underwriting evaluation of the case.

“On a personal level, the individual must be able to stay impartial through the process, and in the face of influencing pressures - in summary every time needing to make calculated decisions by balancing the risk against the reward for the organisation.”

Richard King, BDM at Bridgebank Capital, believes “the whole lending process starts with quality underwriting. The old saying stands firm: “Good credit control starts before you even make the loan.” Underwriters act as the ‘goalkeeper’ and a good underwriter has the ability not only to protect the lender but also the creativity to be able to structure a deal properly.”

James Bloom, Chief Executive of Regentsmead, said: “Underwriters are absolutely key to the loans process, they underpin the likely outcome of a loan and their importance should not be underestimated.”

Withregards to the top characteristics needed to make up a good bridging underwriter, James Bloom added: “Experience and practical knowledge of the inner workings of a loan” as the main criteria.

Steve Nicholas believes,  “There are a number (of characteristics): notably attention to detail, staying power and the ability to be methodical.  Also, in some situations the ability to work calmly under pressure and, although this cannot be defined in real terms, the ability to be able to work with their ‘gut feeling’ is also key. 

“In today’s technological world, being able to spot inconsistencies and identity theft are just some of the issues faced by an underwriting team. They are also required to be flexible and look outside the box when reviewing cases- in that sense a can do attitude is essential. 

“Each case is reviewed on its merits and where, for whatever reason, they are unable to offer the terms requested they will look to structure a solution both acceptable to us, the lender, and the client. Where there appears an increase in risk they will seek to mitigate this – for example, taking additional charges over other assets in order to rein in the LTV.   

“As an underwriting team they must ensure their knowledge with regard to market trends within the mortgage industry is always up to date as well as appreciating geographic variances in property trends/values – this is undoubtedly key when assessing short term funding. “

Brian Levin indicated: “An underwriter needs to be able to be a very focused and organised individual. They need to be able to work to tight deadlines under pressure, but at the same time making sure no issues are missed and all the aspects of the case are properly investigated and completed.”

Mark Posniak added: “The main characteristic that is vital to a successful underwriter is one who sees through all the numbers and paper work. All our underwriters have worked at multiple lenders and banks, have completed thousands of deals and understand all the workings of credit.”

Continuing with the recruiter insight, Peter Gwilliam added: “Additionally, they must be able to interpret information being conveyed in title documents and valuations and make appropriate judgements from these, and regularly analyse and utilise Management Information to improve performance. Throughout, they need to consistently work with compliance and credit risk in the business to see if there are initiatives that will improve existing policies, procedures and processes.”

Richard King told us that “without doubt experience is key, and our Head of Underwriting has been in the bridging industry for over 18 years. There is no substitute for that level of experience.”

We were also informed how big some the underwriting teams are. Brian Levin, divulged: “Our team consists of three underwriters and three assistant underwriters. The background of the team is quite varied as members of the team have been involved in investment banking, property development, accounting, property investment, mortgage packaging as well as working in the broking and mortgage intermediary market. As you can see there is a diversified level of experience within the team which really helps when underwriting a case.”

Steve Nicholas disclosed that within the underwriting team at Tiuta their “Head underwriter is Helen Farmer who has a vast amount of underwriting experience and she is supported by Ian Rennie, Andy Thurston, Iain McCarrell and Stephen Rowland.”

James Bloom described the size of their team to us: “We are a small team given that we are a principal lender and do not have to go to credit committees for approval. This means we are able to give immediate responses to loan requests.

“The background of all underwriters is that they have actually worked at the coal face; in other words they are experienced at not only lending but also getting the money back in! This is essential so that underwriters have a balanced approach when assessing a potential loan.”

Underwriters are vital to the success of any lender in making sure all aspects of a bridge are accurate and correct in order to work with. The speed of an underwriter is also crucial to ensure quick completions. Extensive experience and a proven track record with credit are key criteria for any lender hiring. They are, in essence, the backbone to all operations.

By Jason McGee-Abe

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