Have you noticed lately that loans are a bit tougher to close today? It seems that things we used to be able to get around are now road blocks. I have been asked why this is, and without giving the obvious "its the market" answer, I dug a bit deeper to help people understand what is happening.
What many people do not realize is that there is a great deal of pressure and the responsibility placed on underwriters to make sure the loans they approve do not default. Take FHA underwriters for example.
FHA underwriters must go through training to be qualified and approved to underwrite FHA mortgage loans. They are given an ID number that is included with every loan. Every underwriter's loans are tracked for defaults and foreclosures. If a certain percentage of their approved loans end up in default, they can have their approval status revoked for life... yes, for LIFE and the ability to underwrite loans anywhere could be in jeopardy. So they are really looking hard at every loan to ensure that it is a good risk. Otherwise they may have to change careers.
So while the Realtor, the seller / buyer, and the loan officer are all stressed over the outcome and commissions over that questionable deal, the underwriter sees the same deal as a deal they could potentially loose their job over.
As professionals in this business, we must understand the responsibilities each individual has to make the entire thing happen. And while we all specialize in our own fields, a mutual understanding and respect for what's at stake with the other parties will help us all prepare our clients appropriately.
I hope this helps you better understand why things are a bit tighter right now. Underwriters are being held to stricter standards in what they allow to get through. And in many cases, their very livelihoods are at stake.
To the underwriters out there working hard and making it happen, I thank you for your diligence.
Ed Nailor - Charlotte home loans