I ended up doing one because we were spending money to basically bail out somebody on paying their past two taxes on a hotel because it was considered business purpose as a way for them to avoid foreclosure.” He added: “Other people would say a loan made no sense but put it in second sign for management to review, and it would just get approved. “There was a disagreement between him and the director, and the decision was made to pull him from that department and have him underwrite only regular loans.” “One individual was part of a certain underwriting team of correspondents,” he noted. He claimed he was not the only underwriter to complain about lending standards at the company, but dissent was always met with the same response. “If loan officers were trading this to get loans approved so they could get their commission checks, my concern was that they were going out of their way to coach their borrowers to be able to explain what needed to be written in order to get loans approved.” “Loan officers were creating letters of explanations which should be written by the borrower,” he explained. In one instance, the lender declined a borrower for making a fraudulent application - a correct move on the surface but which also raised another issue at the company. Anything above that would have to go to management, but they would not allow me to suspend or decline loan applications that had to be submitted up to management to review,” he said. He was then placed on a performance review and effectively demoted when he was instructed to approve only smaller loans. “On more than one occasion, I was pulled aside by the executive leadership, stating that these loans needed to be approved because they were repeat borrowers and the threat of these borrowers or brokers leaving the company to seek business elsewhere put a bad taste in some of these executive leaders’ mouths,” he said. X reviewed between 70 and 95 loans at most every month, but when he raised concerns with his bosses, he claimed he was pressured into approving the loans, admitting that his underwriting practices came under heavy criticism from the sales teams. He added: “Borrowers coming in to do cash-out refinances that were strictly for business use, not owner occupied, were purchasing tens of thousands of dollars in stocks for their personal investment accounts.” There was no reserve requirement, which is when a borrower must maintain a certain level of liquidity.” During the summer the guidelines were constantly changing, but that’s when the company came out, stating that borrowers only needed one month bank statement for cash-out refinances. “At a time when interest rates were much lower, the volume was up and we were pumping and dumping loans. Consequently, dozens of exceptions were being made. “The leadership thought that the guidelines were gray instead of black and white, where things could be adjusted to meet requirements. He said: “There’s a set of guidelines that protects a company from an underwriting perspective on what’s allowed what’s not allowed, and without sales, the company wouldn’t be in business and I wouldn’t have had a job - but if sales did not get their way, executive leadership got involved. Read more: Sprout Mortgage abruptly closes, lays off some 600 workers
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