NAMU® IN THE NEWS: December 16, 2011 - "Underwriters Are People Too"

By CYNTHIA ANDERSON, Correspondent
December 16, 2011

"You don't get rogue underwriters who come in with their own little rule books," said Piano. "They're serious, career-minded people who just want to go home at the end of the day and spend time with their families."

Popularly viewed as too lenient in the years leading up to the collapse of the housing market, and too strict in its aftermath, mortgage underwriters, at least according to Piano, are professionals trying to do a tough job well.

"In my view, they're the smartest ones of the whole bunch," said Piano, referring to the panoply of players, from broker to banker to loan servicer, involved in the issuance of a mortgage.

To assess a loan, underwriters typically look at an applicant's three "C's" — capacity, collateral and credit. Capacity suggests the ability to make payments on the loan based on the borrower's income, as well as his or her debt/asset ratio, while collateral refers to the type of property in question, its value, and how it will be used.