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Volume 2014 - Number 47

December 11, 2014

Underwriting Overlays Remain a Concern, GSEs and Lenders Seen as Sharing the Blame

Democrats in Congress and consumer advocates remain concerned about tight underwriting standards for mortgages, particularly due to overlays established by lenders. However, at a hearing this week by a subcommittee of the Senate Committee on Banking, Housing and Urban Affairs, there was a lack of consensus on what causes underwriting overlays. “Instead of matching the creditworthy borrower at the lower end of the distribution with affordable loans, these borrowers are being cut out of the market entirely,” said Sen. Robert Menendez, D-NJ, chairman of the Banking Subcommittee on Housing, Transportation and Community Development. Sen. Elizabeth Warren, D-MA, suggested...

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Poll

With rates higher this year, there has been talk of lenders liberalizing their underwriting standards in an effort to increase volume and make up for lower refis.

Do you think your shop will loosen standards over the coming three months?

Yes, but not by much.
Yes, by a lot.
Yes and, heck, we may even do non-QM lending.
No, not at all.
No and we may even tighten credit.

vote to see results