A mortgage underwriter looks for potential issues that may prevent a borrower from making his house payment. They investigate application information, evaluate the property to ensure the transaction is financially practical, and verify funds involved in the mortgage transaction.
According to CNN, the Federal Reserve estimated in 2011 that nearly 25 percent of mortgage applications are denied because the underwriters find problems with the applicant's credit score, source of income or personal finances. The underwriter wants to see how much debt the applicant has, what his monthly finances are, and how much money he has in savings to pay the mortgage if he loses his job or has personal problems that restrict his income.
The underwriter looks at the value and the condition of the property to make sure the loan is worth the value of the home, in case the homeowner defaults and the lender is stuck with the property. The underwriter verifies funds that will be used to pay for the insurance, taxes, down payment and other expenses that are involved with closing on a home mortgage. The underwriter also makes sure that the applicant isn't trying to take out two mortgages, and that he isn't using a loan shark or other lender.