The Role of a Credit Underwriter

Leading companies make decisions on the issuance of new loans or new lines of credit based on the credit underwriter’s recommendation. Credit underwriters work closely with loan officers to assist them in verifying the adequacy of loan applications. They can also propose revisions to the credit limits or interest rates on existing loans. When we speak about credit underwriters, we are talking about professionals that are responsible for determining the loan eligibility, based on various risk factors to the lending institution. We can also refer to them as credit authorizers, checkers and clerks. They work for banks, government agencies and commercial lenders. They evaluate the information provided by potential borrowers, such as their financial liabilities, credit history, employment and income to calculate the risks of extending credit to loan applicants.

In practice, credit underwriters evaluate and determine the capacity of borrowers to repay their financial obligations. Credit underwriters conduct detailed research on the client to determine its creditworthiness. They review and verify income statements, tax returns and other financial documents in order to develop a borrower's profile and credit recommendation. The credit underwriter performs various functions to determine the client’s risk profile and mitigate the credit risk. The job responsibilities of an underwriter usually include:

• Following all governmental regulations regarding banking, finance, and loans
• Collecting information about potential buyers like financial statements, their capacity to repay the credit and their risk profile
• Verifying the validity of all loan documents and requesting additional information as necessary
• Determining client loan eligibility, loan terms and revising credit limits
• Analysing the risk factors associated with various loans by determining
• Responsible for underwriting commercial loans and preparing presentations
• Taking decision on credit applications under the supervision of senior underwriters
• Utilizing provided software to score credit applications
• Performs annual reviews
• Working with the credit administrator on policies and procedures
• Providing support for business developers on new customers
• Undertakes the analysis, evaluation, and underwriting of proposed credit facilities for customers and prospects
• Assessing credit opportunities; identifies key risks, and structures alternatives working with relationship managers and credit officers
• Preparing in-depth credit packages
• Conducting research on borrowers and industries
• Taking ownership of the credit process, making decisions in the best interest of the customer and organization
• Providing support to account officers on customer calls as needed
• Measuring covenants put in place within loan agreements, with a clear understanding of the effect and purpose of those loan covenants, and communicates the compliance of the borrowers to the relationship manager and chief credit officer as needed
• Completing annual reviews, modifications, extensions, renewals, and new loan requests for customers with minimal required changes from the credit approvers
• Appling experience with comparable credits to recommend appropriate covenants, terms, and conditions, and structure for a credit request
• Identifying policy exceptions within a credit request

Discussing risk ratings and the rationale for the determination of acceptable credits with the relationship managers and credit approvers. The role of the underwriter should not be confused with the client relationship manager. A CRM in fact does not have the task of carrying out quantitative analysis like the credit underwriter. Instead, his focus is on building relationships with customers based on trust and value, rather than price. Client relationship managers work with senior executives, sales managers, technical managers, finance directors and others who make or influence sales decisions. They also may work directly with clients to address problems or overcome other obstacles. While the credit underwriter does not come into direct contact with the customer except when he requests additional documentation.

Client relationship managers also monitor industry trends in order to identify new sales opportunities. They use the data collected to establish revenue targets and identify the resources needed to meet them. They also analyse competitor and assess potential threats for the firm. On the other side, the credit underwriter has the role to recommend or not the operation based on the analysis he has conducted. Another role for the client relationship managers is to organize training, maintenance, and other services to help clients get better and more efficient use from products or services.

In conclusion, the role of the Client relationship manager is more focused on the client side with the aim of boosting the revenue of the company, improving the consumer’s experience and identifying possible threats and opportunities. On the other side, the credit underwriter is focused on the business side. The role is to analyse the client's profile and, based on it, to establish price and clauses that make the transaction convenient for both the customer and the company.