How Credit Unions Can Improve Mortgage Underwriting Quality, Productivity, and Staffing

Guest Editorial by Michael Danlag

At my previous positions with PHH Mortgage and Sutherland Mortgage, I had the opportunity to work with great credit unions through sub-servicing and also fulfilment support for both on- and offshore processing and underwriting.

Michael Danlag

Based on my experience, I have some thoughts on how credit unions can stay ahead in 2025 by enhancing their mortgage underwriting operations. From leveraging intelligent automation to modernizing staffing strategies, here’s how your organization can boost quality, productivity, and member satisfaction.

1. Invest in Intelligent Automation and AI

Productivity in underwriting can no longer rely on manual processes alone. Credit unions should prioritize automation tools that streamline data gathering, document classification, and income verification. Emerging artificial intelligence (AI)-driven solutions can also assist underwriters by flagging anomalies, scoring risk, and even pre-populating credit decision templates.

By automating repetitive tasks, underwriters can focus on judgment-based analysis and complex loan scenarios. This doesn’t replace human decision-making; it elevates it. Studies show that intelligent automation can increase underwriting throughput by 30–50%, without sacrificing quality.

2. Revisit and Standardize Underwriting Guidelines

Outdated or inconsistent underwriting criteria can lead to inefficiencies and rework. Credit unions should conduct a comprehensive review of their underwriting guidelines to identify gaps, redundancies, or areas of interpretation.

Standardization is key, not only internally but also with processors, loan officers, and quality control vendors. Clear guidelines reduce error rates, training time, and friction between departments.

3. Leverage Data to Drive Performance

Data is often underutilized in mortgage operations. Credit unions should refine key performance indicators (KPIs) that go beyond time-to-close, including:

• Conditional approval turnaround time

• Error/rework rates per underwriter

• Pull-through ratios by channel or LO

• QC audit pass rates

Tracking these metrics helps identify top performers, detect training needs, and improve overall workflow efficiency.

4. Modernize Your Staffing Model

Staffing remains a key challenge. A hybrid model blending full-time, contract, and outsourced underwriters provides flexibility and scale.

Consider surge-capable partners during peak periods and cross-train processors to increase operational agility. Remote-first hiring can also expand your talent pool, bringing in experienced underwriters at competitive rates.

5. Commit to Continuous Training and Development

Mortgage guidelines and technologies are changing rapidly. Credit unions should invest in ongoing training: micro-learning modules, workshops, and certification paths like DE (direct endorsement) or SAR (staff appraisal reviewer) can significantly boost underwriter performance and retention.

Conclusion

As 2025 unfolds, credit unions must take proactive steps to strengthen their underwriting operations with an eye toward higher volumes. Focusing on technology, data, processes, and people will be key to delivering fast, accurate decisions while maintaining exceptional member service.

---

Michael Danlag is the former executive vice president of document solutions and servicing strategy for Mortgage Connect. He has more than 30 years of mortgage lending experience.