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[caption id="attachment_9654" align="alignright" width="150"] Dave Hershman[/caption]

Dave: I have heard your question from several loan officers across the nation--not only associated with banks but also with some independent companies as well. There is no doubt that the industry has tightened their credit requirements significantly since the COVID-induced recession hit. The changes were initially devastating, but have eased somewhat since the initial shock. Many had expected things to move back to normal very quickly, but as the COVID crisis continued, the progress has slowed down.

While the greatest effect has been in the non-QM, jumbo and government markets, the effect has hit everyone. Though Fannie and Freddie have not reported underwriting changes aside from temporary COVID-verification and appraisal requirements, many loan officers have reported the DU and LPA decisioning has tightened.

Likewise, not all lenders have reacted equally. The bigger banks seem to be more risk-adverse because they have more at risk, and if you work with a smaller lender or broker with many investor relationships, you are likely to have more choices.

The important thing to remember is everyone is affected. When analyzing the effect on your own personal situation, you must weigh not only the deals you lose because of this tightening, but also the business you gain by being at that institution. Big banks also have huge portfolios which means many who are interested in refinancing.

Dave Hershman is Senior VP of Sales of Weichert Financial and has published seven books and hundreds of articles. He is also the founder of the OriginationPro Marketing System and Mortgage School. His site is www.OriginationPro.com and he can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..