Meet The Underwriter
Author: Gordon Schlicke – Professional Mortgage Trainer
If you want to learn more about human nature, spend some time in a loan-servicing department. It’s hard to believe the attitude some people have about making payments.
“I didn’t make my payment because we needed a new damp mop this month,” one woman wrote. “Damp mops must have gone up in price since I last shopped for one.”
“You have a lot of nerve, threatening foreclosure,” one man wrote. “I’d make the payment, but we need a vacation. I won’t deny my family a decent vacation for some lender.” I think we should insert vacation clauses into our notes for people such as this.
The most feared loan in the collection department is called first-payment delinquency. When I worked in loan servicing, we’d call a meeting with those involved in granting credit. You could hear the stomach acid dripping as we tried to design a cure.
I’ve contacted more than a few of these borrowers and can tell you the reasons provided are creative, inventive, sorrowful and depressing. One woman explained, “Each month I put the names of all my creditors in a hat and draw out their names. I make payments until I’m out of money. Your name just hasn’t been drawn yet.” I wanted to grant forbearance and call this our Lotto-payment plan, but the boss wouldn’t let me.
Some borrowers would rather pay a lawyer to connive their way out of trouble. Lawyers know that the Truth-in-Lending Act (TILA) is meant to disclose the true cost of borrowing so consumers have a standard for comparison. It has nothing to do with delinquent payments. But that didn’t keep one lawyer from calling me on behalf of a client on whom we were foreclosing. “Grant my client forbearance, and I promise not to file suit against your company for an incorrect TILA disclosure,” he said. In the end, we stood by the accuracy of that disclosure, but it made little difference.
Today’s hot-button topic is “total quality.” There are quality teams across the United States trying to make good loans better by adding more paper. In mortgage lending, the quality-control step still is the underwriter.