Monday, March 31, 2008
Funny how things have changed literally overnight. The media and purveyors of reflection wisdom have pointed their accusatory fingers at the housing bubble, loose lending standards, etc. but I think a longer look-back is in order.
In 1998 when I entered the industry we were coming into the age of DU, DO and LP. Automated Underwriting launched "Speed lending" as lenders clamored to race quicker to the consumer, touting the advantages of the 5 minute loan approval. Could it be that "Automated" became synonomous with "Automatic"? Surely we saw the professionalism of the past fall off the edge of the proverbial cliff. Spawning a new wave of originators, the Automated age provided simplicity and certainty. The archaic nature of (gasp) a MANUAL underwrite and it's antiquated "denials" was a thing of the Victorian era. Its antiquated subjectivity, which created a plague of denials in years past, was replaced with the utopian panacea of the "Approve/Elligible". The art of the originator shifted from properly structuring a deal to manipulating the automated underwriting engines.
History is doomed to repeat itself, or in this case, to make a re-appearance. At last check, the PIW and drive-by appraisals and streamlined underwriting findings have been replaced with their pollar-opposite brethrens. Manual reviews are creeping their way back into the equation and the new picture of chic is the originator skilled in writing LOX's....Eat your heart out, Hemmingway. It's about time we brought back the word "professional" into the industry. Long-gone are the days of the quick-talking rookie, armed with nothing more than a laptop and a paper approval.
That sounds you're hearing is the voice of wisdom of a bygone generation of seasoned professionals.
I spotted a few more grays in my morning mirror this morning and I smiled.