Comments on: More Upcoming Changes to Underwriting

By: Rhonda Porter

Rhonda Porter — Thu, 16 Jul 2009 18:17:37 +0000

Will, I agree. A good mortgage professionl should review all supporting documents before submitting them to underwriting to help avoid any possible delays.

By: Will Harrison

Will Harrison — Thu, 16 Jul 2009 16:23:30 +0000

Thanks for the info Rhonda. Although I don’t do residential mortgages (commercial only), we also continue to see tightening underwriting standards regardless of whether the mortgage is portfolio-held, sold or securitized. One of the issues I see daily from brokers, especially the ones that complain about underwriting, is that they don’t look at the documents they are submitting to underwriting. Thus, underwriting cannot “connect the dots” because the representations in the application are not supported by the documents. It’s common sense that underwriting must tighten when fraud and defaults increase.

By: Rhonda Porter

Rhonda Porter — Thu, 11 Jun 2009 20:35:23 +0000

It’s a further tightening of guidelines when borrowers need to refi and Sellers need buyers who can obtain financing.

By: Roger Ingalls

Roger Ingalls — Thu, 11 Jun 2009 20:03:06 +0000

This could also have a bad effect on purchases that are drug out for months (short sales anyone??).

Thanks for the post.

Russ, I think it was your line (borrowed, probably), that explained that underwriting approval wasn’t about common sense, it was about connecting the dots and going down the checklist to ensure the file could be securitized ASAP.

By: Kevin Lisota

Kevin Lisota — Wed, 10 Jun 2009 15:38:41 +0000

This could prove challenging for folks at the bare minimum level of reserves, since they are devaluing stocks and retirement accounts.

By: Rhonda Porter

Rhonda Porter — Tue, 09 Jun 2009 23:40:08 +0000

Credit only being good for 90 days is a concern if you’re working with a client who’s scores are deteriorating… it could cause some folks to delay getting preapproved early on… the very folks who probably need to start early on.

By: Russ

Russ — Tue, 09 Jun 2009 21:15:36 +0000

Just a little rant… it isn’t so much the underwriter’s fault as it it is the banks and wall street. Loans are underwritten so that they are salable, not because they make sense. A very hard concept to grasp. Underwriters for the most part can only check the boxes on lender guidelines and not much else these days.

Our in house underwriters would kill me… but they know it is true.

By: Rhonda Porter

Rhonda Porter — Tue, 09 Jun 2009 20:45:30 +0000

Russ, our underwriters would bite and hiss at you if they read this post…but ours are REAL underwriters since we do FHA and manual u/w.

By: Russ

Russ — Tue, 09 Jun 2009 19:55:22 +0000

Nothing out of the ordinary and probably won’t impact most borrowers. However, I think it demonstrates how underwriting focuses on minutae instead of the overall context of the file. I contend that most mortgage loans could probably be underwritten 10 minutes if underwriters were actually capable of making sound credit decisions based on the facts at hand instead of being glorified clerks which is what most are these days.

By: ARDELL

ARDELL — Tue, 09 Jun 2009 19:39:49 +0000

Thanks Rhonda. Looks reasonable to me. Age of appraisal when I started in the business was 60 days.

I will note that some programs are requiring that the employer note (on the VOE) if they expect the borrower’s salary to increase or decrease in the next 12 months after closing.