Been interesting talking to underwriters these days. Back when I first started, underwriters were very skilled and valued assets of a mortgage lender. They were given a set of guidelines to follow but were largely allowed to evaluate each file on its individual risk. The underwriter was largely "trusted" to make a decision.
Then came the world of automated underwriting. Fannie Mae rolled out Desktop Underwriter and Freddie Mac had Loan Prospector. At that point there was a noticeable shift in underwriting. Underwriters were largely responsible for verifying information that the computer program thought "necessary". Underwriters were still largely able to manually underwrite a file even if the file did not fit neatly into the computer generated box.
Scroll forward to today. Try to find an underwriter that is allowed to manually underwrite a file. The risk of a purchase refusal are simply too great. Most lenders will not even entertain that notion that their underwriter is "capable" of assessing risk on a file. It's an unfortunate devaluing of the underwriter's value. So we as a nation have largely surrendered our underwriting decisions to computer programs.
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