I received the following question from an underwriter. I do not know what mortgage lender she works for nor do I want to know.
I did not respond to her question for several reasons, the main one being I do not give legal advice. However, I do have an opinion and perhaps this is a good place to put it. Here is the question:
What, if any, are the ramifications to the Lender if the Lender requires the
mortgage underwriter to originate loans to walk in clients, then underwrite
and approve and/or deny those said loans? thank you...
Wow, that is a loaded question and if it is indeed a common practice me thinks it is an accident waiting to happen. I see that there are at least two ways to look at this.
An underwriter should be totally unbiased when underwriting a loan. That may be difficult if they also originated the loan and liked or disliked the borrower. It would take very strong character to not be influenced one way or the other.
On the other hand, as a person with years of management experience in balancing budget and controlling overhead and costs, I can see why the lender would need for employees to take on duel roles ... especially in today's market. Is it a conflict of interest? What do you think?
Are there legal ramifications? ... I don't have a clue!
Please, leave your opinion.
Connie
