A “DE” underwriter is one that has direct endorsement certification from HUD – that is, one that can underwrite and approve loans that are insured by the Federal Housing Administration (“government” loans). Since FHA loans have played a much larger role in financing in the last year or two than they did during the years previous, “DE” underwriters have been in high demand. Obtaining the certification (genearlly involving training followed by sponsorship from an FHA/HUD approved lender) allows the underwriter to underwrite a broader spectrum of loans and to stay on top of the varying volume that most lenders experience as rates rise and fall. Often (but definitely not always), the DE makes the individual more valuable to his or her company and leads to a pay raise for the underwriter.
A Direct Endorsement (DE) underwriter’s basic responsibility is to review/certify mortgage loan origination documents for compliance with the requirements of the Federal Housing Administration’s mortgage insurance program.
Previously, DE underwriters were approved by the Federal Housing Administration (FHA); however, as of 1996, the FHA no longer approves individual underwriters. Underwriters are employed by the Direct Lender, and it is the lender’s responsibility to ensure that the DE underwriter(s) employed by them meet the qualifications outlined in HUD Handbook 4000.4 REV-1. The lender must register employed DE underwriters with the FHA using the Underwriter Registry.