A Bowling Ball in a Garden Hose...

I am a little frustrated with the mortgage industry right now. Underwriting turn-times are getting out of control with MANY lenders. There are many lenders quoting 20 plus days to underwrite both purchases and refinances. That needs to change, but it probably won't be able to for a while.

The entire industry has had to adjust to the new lending climate- less loans funding, smaller profit margins and greater losses on the servicing end. This leads to, you guessed it, downsizing. When rates were higher and the flood of money slowed to a trickle, banks responded by "right-sizing" their operations and laying off underwriters, funders and other necessary personnel. You can't blame them, they did what they had to do. Underwriters didn't have loans to underwrite and I would suspect that many were getting pretty good at minesweeper (if you know what I mean).

Fast forward to today- rates are low and the number of new loan submissions is sky-high. You may have seen on the news or read that the number of loan submissions has increased and that the industry is busy. That would be great if all of the submitted loans were closing. There are a huge number of junk loans clogging the pipelines at lenders. There are a lot of crummy loan officers that have no problem taking ten loan application a day and submitting them all to banks. I don't look at loans as darts that are thrown at a giant dartboard. LO's are an opportunistic bunch and will try to make money however they can. Not all of the blame can go to the LO's though- many times the loan companies are pressuring the loan officers to get the apps and get them in. I think that's just stupid. Why should I (or any other responsible LO) try to coerce out clients into refinancing if we don't honestly see a reason to do so or if the scenario doesn't pass the sniff test? Crazy.

I'd rather have a smaller number of MAKE SENSE files in that have a CHANCE OF CLOSING than a ton of crappy apps that die. If everyone thought like me, maybe the pipelines would clear and the good loans could find in a timely manor.

Ugh...