An industrywide shortage of underwriters may soon collide with the recent foreclosure moratoria to create several problems.
The capacity crisis in mortgage originations is being precipitated in part by a lack of competent underwriting talent relative to demand. With pipelines bulging, the cost of an underwriter has virtually doubled in the last six months and loan cycle times have extended dramatically, exceeding 80 days (up from 45).
Underwriters provide the critical thinking skills necessary to determine if a borrower is eligible for a loan. Underwriters must successfully complete their analysis or there is no loan—none.
To determine if a borrower is eligible for a loan, an underwriter must detect and resolve inconsistencies (i.e., anomalies) that occur within the infrastructure of a loan. Underwriters look for anomalies across the three elements of loan infrastructure:
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