But the underwriter *does* have the right ...

By
Real Estate Services with Digital Content Creator

Yesterday I was at an event with a group of my favorite REALTOR organizations and, as always, the chat eventually turned to how crappy some other lender is. I was listening, politely, and understanding some things the agent may not have understood about how loans can get askew during the process until they said, "You know, these underwriters think they can just ask for anything from us!"

Right on. They can.

Underwriting guidelines are there for a purpose - to serve as a guideline for making wise lending decisions. Underwriters do have the "right" to ask for additional supporting documentation in many instances especially if other guidelines are only marginally met.

If you knew an underwriter personally you would know they have a responsibility to the originating lender and ownership of that loan for the remainder of its life. If they make too many lending decisions which result in loan defaults, especially early payment defaults (EPD) not only can they lose their job but they can lose their Designated Underwriter (DE) approval to underwrite FHA loans.

Undewriting is not a joke.

Underwriting is one of the most crucial components of loan issuance or denials. Certainly you, your buyer, your seller, the loan officer, and others have the right to question or dispute an underwriter but ultimately not only can they require additional supporting documentation but they should and must.

Can an underwriter be wrong? Yes! The best way to overcome the opportunity for an underwriter to be wrong is by working with an experience, licensed, Mortgage Loan Originator who works for a recognized and respected mortgage lenders.

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I started writing on Active Rain in 2006 when I was representing the mortgage industry. I am no longer in that industry and many of the older posts contain outdated information. Please do not contact me for LENDING or MORTGAGE questions but rather contact a licensed mortgage professional from your area. I have always been in marketing and branding and that is still what I do. Thanks for reading!

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Re-Bloggged 4 times:

Re-Blogged By Re-Blogged At
  1. Louise Thaxton 07/15/2011 10:52 AM
  2. Cory Barbee 07/15/2011 04:11 PM
  3. Garrigus Real Estate - Call Now: 1 (888) 9-LIST-IT 07/16/2011 03:07 PM
  4. David & Lisa Webber 07/17/2011 11:27 PM
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Topic:
Mortgage / Finance
Groups:
Ask KEN
Buyer Information - What Buyers Need to Know in Today's Market
North Georgia Real Estate
True Mortgage Professionals
Tags:
underwriting

Comments 64 New Comment

Rainer
134,657
Ben Yost - 303-587-4297
FHA, VA, Homepath and Jumbo - Mortgage Loans in De
First Time Home Buyer, Mortgage Rates, Pre-Approval

Pretty simple:

About the same time they brought in the HVCC apprisal rules a couple years back- they also threw out any common sence when it comes to interpreting the guidlines.

Underwriters are afraid to do any thing out side the little box, that has been created by over-correcting everything thru regulation.

To answer Jeff's question in post #58: "I wonder what Underwriters say about Realtors®"? 

Underwriters don't like Realtors. They think you are all a bunch of con artists trying to pull a fast one so that you can collect your way to high commissions.

It alright they think the same thing about Loan Officers and Appraisers or anyone else involved in the transaction.

Good post!

 

July 16, 2011 10:17 PM
Rainmaker
271,087
Ken Cook
Writer For Hire
Digital Content Creator

Wow! I guess I should have logged in over the weekend to respond to all of these posts. I had no idea the topic would be so hot. Thank you all for your comments. I really cannot improve on anything you guys have said - 95% of you really do get it. The other 5% are just pissed because they've lost commission and trust me I understand that!

July 18, 2011 08:49 AM
Rainmaker
116,184
Dora Griffin
NMLS 6380
D A Griffin Financial.LLC

It is a difficult day in the housing world across the board. Underwriters are being especially cautious because they have to. They DO have the right to ask for more if they are not comfortable with the loan. Their jobs are on the line.

When I begin a loan with any borrower I tell them what my expectations are as to timeline and I gather the supporting data to the best of my ability. I remind them that I've got a lot of experience, but the underwriter has the trained eye. He/she may ask for additional data. I tell the borrower exactly this up front. I ask them in advance to be patient because we are in a whole new world of mortgage lending. Loans are not easy these days. My hope is that Realtors are conveying the same message.

July 18, 2011 03:35 PM
Rainer
194,780
Gerard Gilbers
Your Marketing Master
Stingray Performance Marketing

I just had a case where the underwriter's would not make a final decision and passed it on to the investors to see if they would fund the loan. They are doing what they need to do to satisfy their "bosses".

July 18, 2011 10:21 PM
Rainer
123,391
Jeff Coon
Direct Mortgage Lender
Annie Mac Home Mortgage

It is not easy to get an approval these days, compared to the wild west days of yesterday. I like what #9 commented above, he hit it right on. http://activerain.com/blogsview/2402423/but-the-underwriter-does-have-the-right-#9720705

Good underwriters will communicate clearly about what they need & why, and yes their job is to protect the lender from fraud & buybacks, defaults, etc.  Good mortgage reps understand underwriting guidelines, and anticipate the items that will be needed.  I think much of the frustration with 'underwriting' comes from mortge reps who don;t understand what will be asked of a client, and then perpetuate the stereotypical blaming of the resulting turn down on underwriting.

For the record, some underwriters ARE better than others, same as in any job/field. 

July 19, 2011 10:48 AM
Rainmaker
271,087

Ken Cook

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