Underwriting is a critical aspect of the lending process and involves assessing an applicant’s eligibility for a loan. This isn’t always an easy task; however, as underwriting criteria isn't always clear and can vary between institutions. When it comes to fair lending, it's crucial to have a well-defined roadmap for underwriting criteria so that you can ensure that applicants are treated fairly and equally. Failure to have a roadmap can result in lenders who handle the same issue differently. For example, if you have some lenders that gross up non-taxable income and others that don’t, it could result in unfair lending practices. Having a roadmap, ongoing monitoring and training help to ensure all employees are on the same page.
Jerod explains more in the video.
Video Highlights:
- Having a well-defined roadmap for loan underwriting helps mitigate fair lending risk.
- Lenders should be consistent in their underwriting practices, as well as with other lenders in the institution.
Published
2023/12/14
