Differences between Production, Underwriting and Capital Markets
Hello all,
I am looking into Freddie Mac's real estate analyst program which can include placements in a few different groups. The main three I am interested in are underwriting, production, and capital markets.
What are differences in responsibilities between these three groups? Capital markets seems to be involved with the securitization of loans purchased by FM, while production and underwriting seem pretty similar to me.
As someone who would like to work on the investment side of the business one day, which group would be the best opportunity to learn more about real estate, or have the best exit opportunities?
If you goal is to eventually work on the ownership side, I suggest either Underwriting (aka “credit” in Freddie land) or Capital Markets.
Production at Freddie is the front end interaction between Freddie & mortgage bankers. Producers primarily provide mortgage bankers with interest rate quotes with the eventual hope that the banker’s client will choose Freddie as their capital source, which results in the borrower then “going under application”.
Once a deal is under application, it gets offloaded to Underwriting who is responsible for actually getting the thing closed. This results in underwriters getting into the weeds on things like legal/title issues, third party report findings, property operational issues, etc... In my opinion, this is a much more applicable skill set for what you’re trying to accomplish.
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