Special offer

Who wants to be a loan underwriter? Not me.

By
Title Insurance with John Bethell Title Company, Inc.

Getting deals closed is increasingly frustrating. The current dynamic nature of loan programs and guidelines is making everything more difficult. The lightening rod for all of this is often the loan underwriter. I'll admit that more than once I've wondered why something is a problem on a deal where the buyer is putting 30 or 40 percent down.

I've tried to imagine what it must be like to be a loan underwriter now. Rather than incur my wrath, loan underwriters now engender my sympathy and understanding.

Many go to work in a large office with few people. Cubical ghost towns. Friends and coworkers fired in the past year. Are they next? Is their employer is going to make through the next quarter?

They may feel as if they don't know anything anymore. Most of the old loan programs are gone. The new programs change daily. Many of the people they have to deal with think they know everything, but they don't. Keeping up with it all must surely be stressful.

Managers are demanding that they be more productive. Yet, there are more checks and double checks in the process. New audit controls and reviews. Every decision they make is subject to after the fact second guessing. Most are prohibited from exercising any independent judgment.

I'm guessing that lawyers have rewritten some of their process guidelines. Lawyers are hired to save money, not make money. If something doesn't fit in the template we get bizarre instructions such as "You can't show the earnest money on the closing statement." True story.

I expect that whatever little appreciation is expressed for a job well done is lost in the tsunami of protests and complaints about other transactions. "What have you done for me lately?" times ten.

I'm coaching my employees to not get excited about constantly changing instructions and delays. We try to keep the communication lines open. We try to help everyone involved, realtors®, buyers and sellers to understand its part of the process right now.

If your next deal gets delayed in underwriting, don't be mad at the underwriter. They're just trying to live through this mess like the rest of us.

Comments(5)

Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

The pendulum swings. First they were all on the golf course approving loans between holes. Now they are looking at minutia. Soon I hope we wil go back to being reasonable

Oct 30, 2008 11:29 PM
Richard Shuman
The Only B.S. I Have is from the University of Massachusetts - Lake Mary, FL
Real Estate Broker - Orlando Area - Love Referrals

great point - we do always get mad at them - I'm sure the auditors are looking at them too!!!

Oct 30, 2008 11:32 PM
Sue Botelho
Waterstone Mortgage Corporation - Fort Walton Beach, FL
USDA Rural Housing Mortgage Pro

I was an underwriter for 10 years before becoming a Loan Originator (3 years ago).  My employer was of the "if you can argue and file and make it make sense, we can close it".  I think that most underwriters are now looking for reasons not to close loans instead of looking at the factors within the file that may make it work.  Yes, guidelines have changed and there are programs that are completely gone but the fundamentals of underwriting still remain.  I love the underwriters we have at our company - they are quick, smart, and they do "good sense underwriting".  We can get a loan closed in a day if we have a full file and they talk to their originator prior to declining a file to see if there are compensating reasons to approve what looks like a "bad" file.  I loved underwriting and I think that experience has helped me tremendously as I can look at a new file coming in and tell the client whether or not the loan would be doable and how to make it work, if it's not.

Oct 30, 2008 11:39 PM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Underwriters are the ones who decide the final outcome on the loan and if it's suspect to errors then they might pull it at the last minute...sometimes they call for a review of an appraisal as well..I've never seen a pullout on such a high amount down but if it's under 20% they probably do it more than not. It's a hard job but they never like to talk to agents.

Oct 30, 2008 11:43 PM
John Bethell
John Bethell Title Company, Inc. - Bloomington, IN

Charlie: I agree, although I doubt the underwriters were playing much golf. They do real work.

Richard: I expect they're getting second guessed more than a blind umpire.

Sue: You're fortunate. Most of the time our impression is the underwriter has no ability to exercise any judgement and is just trying to make things fit into a template written by a lawyer.

Neal: Yes, they often won't talk with anyone. That's a customer service lack of customer service model their managers have implemented. It's quite good at making a bad situation worse.

Nov 01, 2008 01:34 AM