Differentiation Between Origination and Underwriting In Lender Vocabulary
Hey all, pretty simple question here, that frankly I'm embarrassed to be asking. But anyways, I notice at a lot of boutique lenders some shops tend to differentiate between their Originations team versus their Underwriting team. From my understanding originations is more about sourcing and being in the market anticipating what types of capital solutions you can provide to capital seekers. My question then is what exactly does a designated "Underwriting Analyst" do? Strictly modeling and diligence? Is there a reason why debt groups don't let their modeling analysts face the world? Please advise.
Underwriting analysts typically don't touch it until the deal is signed up but they're helping with the credit memo and all the processes necessary to get through committee. I'm not sure the exact reasoning but I think it's kept separate because they're not incentivized by that particular deal closing (moreso general company performance). They typically interact with the borrower so it's not like they don't talk to anyone though.
I've found that lenders can really vary in how this is set up. Some lenders will have the same person source, underwrite, and close the loan. Others will have the originator source the deal, do back-of-the envelope math to decide whether to kill the deal or not, and then pass it on to the underwriting team to take it from there. Some lenders have the originator send an LOI before passing it on to the underwriting team.
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