The difference between what insurance companies earn from underwriting and what the policies cost (how much they have to pay) is the underwriting gain or loss.

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Investors who offer jumbo loans give borrowers access to higher loan limits, but they also have tougher underwriting requirements and can cost more than conventional loans.

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Commercial Lending X has not only relieved banks of much of the loan underwriting and processing (cost-center) burden, they have also found creative ways to increase bank revenues by brokering denied loans to generate referral fees from other lending institutions, by finding participants to help larger loan transactions get done and by bringing banks new customers.

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Staffing logistics for underwriters and processors are difficult to balance between demand and profitability models and the mortgage lending industry has not yet found a way to justify the manpower cost of processing and underwriting pre-approvals.

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An underwriting loss means that insurance policies yield less in premiums than they are projected to cost in eventual claims and other costs.

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This suggests that they pay fixed fees for share underwriting because, in this market, they place certainty and speed of negotiation above cost.

ECONOMIST: Investment banking