Taking the middle view on underwriting
Little consensus was evident on where underwriting standards stand today. Many of the top producers feel that underwriting standards remain too tight, while a slightly larger percentage think they are acceptable.
Approximately one-third of originators who work for companies that do not service their own production, which typically means the loans are being written to other entities' standards, of this group supported the view that standards remain too tight, ranging from slightly agreeing to completely agreement.
And in fact, loan underwriting standards finished 2018 slightly tighter than they ended the previous year, according to the Mortgage Credit Availability Index. This is a measurement of how tight or how loose lenders have their program guidelines from the Mortgage Bankers Association and Ellie Mae AllRegs. Most of the tightening with government product offerings, while lenders only slightly relaxed their conforming guidelines.
The introduction of verification of asset and income tools to ease the process for the consumer changed they viewed underwriting, said Troy Williamson, a mortgage consultant with On Q Financial in Wilmington, N.C. "After the recession and housing crisis, underwriting requirements became more tasking for the consumer. These tools helped to streamline the process and take some of the pain out of the process," Williamson said.