Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.

Wells Fargo and Bank of America have been the first major banks to say they are starting to see demand for home loans taper off. Wells, one of the biggest U.S. mortgage lenders, reported that its pipeline of applicants for new home loans has dropped 40 percent, with BofA ‘s decline close to 45%. As interest rates move off of their historic lows, many banks and those in the mortgage industry are looking to adjust their staff levels to match the decrease in business. Fortunately, at Approved Funding our volume for new mortgage business continues to grow, and we have been looking to take advantage of the (too) many industry veterans that have been displaced or terminated as a result of market circumstances.

In our pursuit of additional personnel, we are seeing resumes with all experience levels, including many with decades of experience in the industry. Although we are looking to fill numerous positions, I personally, have mostly been meeting with senior processors and mortgage underwriters to help vet their experience levels and qualifications. On paper, they carefully detail everything that a new potential employer would want to see and hear as to their level of proficiency and acumen. What I end up finding out has been very enlightening, however.

I was recently sitting with an applicant who was applying to be an underwriter at our company. She worked at a local regional commercial bank that is known for doing a great deal of mortgage lending. She was with this bank for over 15 years, and oversaw 3-5 processors who would submit files to her for approval. Like many banks, most of their mortgages were conventional loans that eventually were sold to “The Agencies” (Fannie Mae or Freddie Mac). When I started probing about her knowledge of the agency overlays (ie: restrictions), and her experience navigating through the distinct guidelines, I was greeted with a blank stare. She admitted that she wasn’t familiar at all with the differences between the agencies – and if a loan didn’t meet guidelines “as-submitted” it was denied. When I asked about her understanding of appraisals, she quickly told me that they had a separate manager who would review appraisals, so she wasn’t versed with appraisals altogether. I asked about her proficiency in understanding self-employed income and tax return analysis, she nervously pointed out that there was a senior underwriter who would review “those types of loans”. Not only did I realize that she was not a good fit for us, I now understood, again, why it takes so long for some of these banks to approve a loan – and why so many loans are being denied.

In another interview, I was sitting with someone who had over 10 years of underwriting experience. Last year when her bank was bought-out she lost her job. She went to work at a fairly sizeable NJ bank in Bergen County. I asked her why she was thinking of leaving the bank after only 4 months. Her answer was, “the mortgage department in this bank is a joke.” She continued, “no one knows what they are doing, and although I was hired as an underwriter, I merely process loans and submit them to other banks for review and approval.” She went on to say that only 2 of her loans have closed since she started working at the bank a few months ago.

With another candidate, I was the one with the blank stare after she told me her bank’s process. At her bank, she explained, applications are submitted online and initially processed by an outside vendor. After the applicant completes the online application, the processing service provides them with the applicable disclosures and a list of documents needed – and collects a “sizable” fee. At the bank level, she gets an alert at which time appraisals are then ordered, credit is pulled, and verifications are processed. The documents are then combined by her from all of these external sources. Given the two-tier process, where one hand doesn’t know what the other is doing – it’s easy to see why this bank only closes 25% of their loans. Ouch!

I can continue to detail many other interviews with the eye-popping comments, and insights that I have learned as to what is going on “out there.” The take-away for me has been – banks come in different shapes and sizes – many are bigger, with more offices, more loan officers, more employees, more advertising, more closings, more money, etc – but when you are dealing with the needs of a local “Joe or Jane Borrower” who just want someone to understand their plight and guide them to approval – more can be less.

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