Mortgage Lending, the Old-Fashioned Way
Although 90 percent of today’s mortgages are backed by the federal government — through Fannie Mae, Freddie Mac or the Federal Housing Administration — there are still some lenders who are opting to hold mortgages in-house. These are generally smaller community banks or credit unions that have a more “common sense” vision of mortgage lending, a smaller and more personal approach that is appealing to borrowers. These institutions generally rely less on computer-generated qualifying techniques, and instead look at the borrower’s personal credit and financial history. This allows them greater underwriting flexibility and freedom from the strict rules and inflexible nature of larger institutions.
SOURCE: The Washington Post, 7/7/11