During last year's refi boom, we saw just how desperate mortgage lenders were desperate to hire underwriters.
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During last year's refi boom, we saw just how desperate mortgage lenders were desperate to hire underwriters. Some offered hiring bonuses and base salaries of as much as $150,000.
According to career research firm Zippia, there are currently 97,606 underwriters currently employed in the United States. It's a relatively small group, compared to 308,000 loan officers, per the Bureau of Labor Statistics, and nearly half a million real estate brokers and sales agents. Why so few?
One possible explanation came up in a recent conversation I had with Bill Dallas, president of Finance of America Mortgage. Since the great recession, according to Dallas, underwriters have decamped to work at due diligence firms that audit loans for investors.
Those due diligence firms have proliferated in the years following the great recession in part because of heightened auditing requirements for private-label securities, Dallas said. Before 2008, only a portion of the underlying loans making up private-label securities pools were audited. Usually, it was a random 10% sample of the loans. Auditors could also opt to scrutinize the highest-risk loans in the pool.
Investors now hire auditing firms to examine every loan in a pool. Depending on the size of the securitization, Dallas said, it could add a month to the process and an additional 25% to as much as 50% to the cost of the securitization process.
Do you think the current auditing process for private-label securities is overkill? Send a note to: gkromrei@housingwire.com
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