A mortgage underwriter assesses the risk of each individual mortgage application. The mortgage underwriter looks at credit history of the applicant, the appraisal of the property in question, and possible down payment considerations.
Since the mortgage underwriter is assessing the risk for the loan, they can also form certain guidelines. They may only offer mortgage loans for example, to those with the credit rating of 700 or more.
They may also have specific guidelines regarding specialty properties like condominiums. Many underwriting guidelines require condominiums to have a 50% or more owner occupancy rate.
In addition, foreclosures should not be more than 10% of the building. These guidelines lessen the risk of defaults for the loan, which is what a loan underwriter's primary function is.