The primary job of the mortgage underwriter is to see that none of us enjoys our work. We can have a good time putting a deal together and taking applications, but the underwriter's role is to look at the worst-possible side of life. I'm not against this step, mind you. But I've always wanted to buy Norman Vincent Peale's book The Power of Positive Thinking and send it to the entire underwriting department.
Underwriters are most suspicious of self-employed folks and will carry that cynicism to great lengths. "Provide financial statements and tire-tread depth on tires of applicant's car," one underwriter said to me. That's going pretty far. Another added this condition: "Provide statement from borrower that he is engaged full-time and has no other interests." The borrower's fiancee would appreciate that.
Our credit system has difficulty qualitizing (my word) anyone who earns income in an unusual way. People make a living doing outrageous things. Take a bungee-jump operator: Underwriters simply refuse to believe you can make money throwing people off bridges. I think it's because underwriters have never experienced a true adrenaline rush. In one case, an underwriter said, "Provide evidence of adequate liability insurance and how many jumps have failed." Excuse me? You want to know if anyone died doing this? I can just picture the entire underwriting department gathered at the base of the rocks saying, "He'll never make it."
Sometimes the underwriter doesn't like the property. One house, perched on a hill, had railroad tracks at the base of the lot. The underwriter wrote, "Submit geological evidence that train movement will not jeopardize structure or contents and obtain decibel readings from a reliable source to assure sound will not interfere with the quite use and enjoyment of property."
Every loan originator has a favorite underwriting story. My ultimate case was a borrower, blinded by an industrial accident, who was receiving a generous monthly check. The underwriter's requirement? "Provide current eye-exam results showing less than 10/10 (vision) in each eye and a sworn affidavit from an ophthalmologist that applicant is legally blind." I just didn't have the heart to do this, so I sent a picture of the man with his seeing-eye dog. The underwriter wrote back, "Anyone can put on a pair of sunglasses."
To some, that's quality control. But I'd rather see us have bigger hearts.
That's lending brother.
About the Author: Gordon Schlicke is a Professional Mortgage Trainer in Seattle and can be reached via his web site. The original article appeared in the nations most popular mortgage professionals publication the "Scotsman Guide" and was reprinted here, for your enjoyment, with the authors permission.
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