The Irrational Underwriter

Written By: Bonnie Wilt-Hild

So I have spent all week listening to a loan officer complain endlessly that he had to obtain a condition that he thought was unreasonable, that condition being a letter from the borrower, yea I know, I’m clearly over the top. In this particular instance, I had requested a letter from the borrower acknowledging that she was aware that the refinance transaction she had applied for would result in an increase in her monthly mortgage payment, this due to rolling in substantial closing costs and an increase in taxes.

His argument was but we are reducing the interest rate so there is a benefit to the borrower and mine was I agree but overall cost of the transaction could be construed as a detriment particularly considering that he was making a fee that was more than fair considering the amount of work required for a streamline refinance. I tried to explain to him that we have a fiduciary responsibility to our borrowers and that there were consumer protection laws in place that discouraged these types of practices but at the end of the day I’m still unreasonable and probably bribed my congressman to approve that law just so this loan officer couldn’t make a fee on this transaction.

It seems to me that there is a sad misconception that underwriters just run around making stuff up as to make borrowers and loan officers completely miserable and of course to stroke our god complexes. I myself hit the internet recently to see what type of commentary I could find on the subject matter and you cannot believe the number of blogs I found by individuals and industry professionals alike that utter the same stuff. The underwriter did this, the underwriter wants that, you just can’t please this underwriter, I have had trouble with that underwriter from the start, I went over that underwriters head to his/her manager to get that condition waived and so on. After those blogs ended the next set began which went like this; The mortgage industry imploded because of irresponsible underwriting practices, I was financially damaged because that underwriter shouldn’t have approved my loan, the underwriting staff was not practicing fiduciary responsibility, sub-prime mortgages were made to borrowers who clearly didn’t qualify and it goes on and on.

I would like to say that I am sure that every underwriter out there is requesting no more than the information they need to approve the loan but I’m sure that’s not the case. I have certainly seen my fair share of stupid conditions but by and large I think most underwriters are really just trying to make sure that the borrower is qualified and ultimately will be able to afford the home they are purchasing. The real name of the game is sustainable homeownership and granted most borrowers don’t want to hear that you don’t qualify that size of home but the alternative is much worse which is sorry you put all that money into the purchase and down payment but now that your delinquent on the loan you couldn’t afford in the first place were foreclosing.

Believe me when the loan officers are telling the borrowers how unreasonable the underwriter is they generally don’t share that bit of information. Take it a step further, the individuals who do all of the complaining are not the ones who are responsible for making sure the loan meets standard underwriting criteria, meets investor underwriting criteria, meets criteria for mortgage insurance and of course falls within legal lending practices. That’s right the federal law that governs most mortgage transactions like RESPA and TILA. All they are thinking is why do I need to explain the multiple large deposits appearing on the borrowers bank statements, after all none of them exceed 2% of the sales price.

It makes you want to scream “Well how about the borrower could have obtained those funds through illegal activity like selling drugs or weapons and if it’s proven that our lien is null and void and when was the last time you were deposed or maybe the borrower just systematically cashed advanced their credit cards for amounts less than 2% because someone coached them that it wouldn’t be questioned.” How about just that prudent underwriting practices decree that we address all aspects of the case and determine that the case meets not only acceptable underwriting criteria but that all necessary documentation required to adequately assess risk be obtained. I wonder how many of the loan officers and realtors would reach into their own pockets and lend some of their own borrowers $450,000 no questions asked?

I really hope the next time an industry professional decides to start complaining about the underwriting staff they ask themselves what they would ask for if they personally were on the hook for the underwriting decision. I guarantee they would start thinking more like an underwriter and less like someone who would bore no real consequences should the loan go into default. I have said it more than once, if you want the underwriting process to go smooth then collect the required documentation from the borrower and really prequalify them. Assessing risk really is more than just looking at the credit score and making sure the borrower has enough to close. With that I will leave everyone with a 


 for the week, just a little underwriter humor, hope you enjoy!


A woman in a hot air balloon realized she was lost. She lowered her altitude and spotted a man in a boat below. She shouted to him, "Excuse me, can you help me? I promised a friend I would meet him an hour ago, but I don't know where I am."

The man consulted his portable GPS and replied, "You're in a hot air balloon, approximately 30 feet above a ground elevation of 2,346 feet above sea level. You are at 31 degree, 14.97 minutes north latitude and 100 degrees, 49.09 minutes west longitude.
"She rolled her eyes and said, 'You must be an underwriter." "I am," replied the man. "How did you know?"

"Well," answered the balloonist, "everything you told me is technically correct. But I have no idea what to do with your information, and I'm still lost. Frankly, you've not been much help to me."

The man smiled and responded, "You must be a loan officer."

"I am," replied the balloonist. "How did you know?"

"Well," said the man, "you don't know where you are or where you are going. You've risen to where you are, due to a large quantity of hot air. You made a promise you have no idea how to keep, and you expect me to solve your problem. You're in exactly the same position you were in before we met, but somehow, now it's my fault."

About The Author

Bonnie Wilt-Hild - As an NAMP® staff writer, Bonnie currently serves as a senior instructor for FHA Online University ( as well maintains a full-time mortgage underwriting position as the Senior FHA DE Underwriter for a major lending institution. With over 25+ years of senior-level FHA/VA Government underwriting experience, Bonnie is considered the "Queen of FHA Loans". If you're interested in becoming a writer for NAMP®, please email us at:


Opinion-Editorial (Op-Ed) Disclaimer For NAMU® Library Articles: The views and opinions expressed in the NAMU® Library articles are those of the authors and do not necessarily reflect any official NAMU® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMU®. Nothing contained in this articles should be considered legal advice.