Steer clear of risks by knowing the tenets of underwriting and post-closing due diligence
Today’s originating and lending environments are dramatically different
from what they were as recently as 2007. Regulatory compliance, licensing
requirements, underwriting guidelines, FICO scoring models and even the
appraisal process have all undergone drastic changes. Mortgage brokers and
originators now must be more than mere salespeople. To achieve success and
avoid costly mistakes, today’s originators also must be well-versed in database
management, disclosure laws and underwriting.
Navigating the world of underwriting can be tricky business, however.
Even if a loan fits given parameters and guidelines at the time of closing,
originators still can be held liable for mortgage-insurance rescissions and
repurchase demands long after a loan’s closing. When it comes to steering
clear of underwriting trouble, brokers and originators must have a solid grasp
on general underwriting processes and the many layers of due diligence that
occur after a loan closes. >>
By Tisha D. Hartman
Senior forensic underwriter
zIngenuity Inc.
Illustration by Dennis Wunsch
