I must honor Vicki, from Wells Fargo, for approving a very tough mortgage using good old common sense underwriting.

 

When Vicki called and told me, a very important client’s mortgage was approved, I truly became teary eyed. She humbly explained that she had spent 4 hours reviewing the file and, although it did not really fit the guidelines, she was approving it based on the borrowers’ future income potential!  This loan was sent by me (mortgage broker) to five other lenders, all which rejected it quickly. Each rejection was based on the only reason in that, “it did not fit the guidelines”.

 

Well, it did not fit the guidelines, if you were reviewing the file as a robot. However, with the human touch, the loan had many compensating factors which overruled the one thing that did not work.  Unfortunately, with FNMA and loan matrixes and Wall Street, a loan need only- and must- fit the guidelines to be approved. Over the past 5 years or so, mortgage underwriters simply became reviewers and were not allowed to use their own experience and training to make approval decisions. Perhaps this came from  lenders’ fear of not be able to sell the loan to Wall Street or simply keeping up with production volume.

 

Even more so now, the lenders are only offering the loan if it works in every sense. There are no longer explanations of credit, exceptions for employment/income history or waivers of asset requirements. The loan will only be approved if it is perfect. Yes, we can see why this is the plan for now, based on past performance. However, there are so many good solid borrowers out there unable to get mortgages because there is a certain something making them a risk for the lender to be able to sell the loan. Sadly, many people will be unable to get mortgages in the near future.

 

If one is to get a mortgage, they must be (financially) perfect in the eyes of the (money) beholder. It is a must to have credit, income, debt and assets reviewed prior to beginning the process. Only an experienced loan officer who is up on the current guidelines will be able to give you a good idea if you can get a mortgage. There are no more favors, no more shots in the dark and certainly no more “no doc” loans. However, there should be some common sense used on the part of the lenders. Until such time, we must all fit the matrix! 

 

Thanks Vicki!

 

Dale Siegel