In the wake of hiring almost 30,000 mortgage restructuring specialists to avoid a wave of home foreclosures, the big mortgage lenders have a new urgent hiring need: loan underwriters.
Specifically, firms are looking for underwriters who have come up through the ranks and already have experience in processing and closing mortgages. Underwriters will also be expected to be familiar with new Federal Housing Authority regulations and understand how to check credit history, unlike their predecessors in 2005 and 2006, who were not necessarily familiar with FHA regulations and whose lax underwriting policies helped precipitate the subprime mortgage crisis.
Christine Clifford, vice president at Access Mortgage Research, a Columbia, Md.,-based mortgage research and consulting firm, estimates there are about 5,000 available underwriter positions nationwide. "[Lenders] are all griping to me about the lack of qualified staff," she said.
The lack of talent stems from how companies hired underwriters before the crisis. Then, underwriters "basically just verified data," said Christopher Hart, the president of First Cal Mortgage, a Calif.-based mortgage lending company.
Rather than verifying to ensure a borrower was a worthy applicant, underwriters were merely asked to ensure that data was input into an automated system correctly. As the volume of mortgages grew, lenders hired more and more staff to keep up with the influx, but didn't necessarily require them to have the complex underwriting skills they are demanding today.
It wasn't uncommon to see lenders rely on temps for their underwriting needs -- up to 20% to 40% of their underwriting staff, Clifford said.
Now, there's much a higher premium placed on qualified underwriters to ensure compliance with federal regulations. The industry has revamped its standards for underwriters and is now searching for talent that meets those standards.
"Good underwriters are hard to find," said Jack Karaszewski, the executive vice president of business development at XINNIX, a mortgage training academy. "They need to have knowledge of FHA and VA regulations, be aware of all the appraisal requirements, and know how the credit reporting agencies operate. They need to know the particulars of the marketplace in whatever city they're in. To become an underwriter takes tremendous training these days."
CitiMortgage said that since mid-2009 it has been in growth mode and has been hunting for underwriters (it declined to specify how many it's hired). Wells Fargo has hired an additional 150 underwriters recently due to the higher volume of homebuyers with loans with a June 30 deadline, a spokesman said.
Fifth Third also increased its underwriting hiring. "We've noticed the expansion of our underwriters goes hand-in-hand with our goal to increase loan originators," said Janet Brinkman, vice president and mortgage recruiting team leader. "We've increased hiring in our fulfillment areas (pre-processing, processing and closing) by at least 5 percent."
Smaller lenders are also looking to beef up their ranks. Hart of First Cal Mortgage said the company has brought on 10 underwriters over the past 10 months and will continue to expand.
He also noted that underwriters don't necessarily have to have mortgage-related experience, and has observed a shift toward outsiders. CPAs, for example, can break in because the skill levels of CPA surpass those required in the underwriting industry.
Write to Julie Steinberg