Demand for loans guaranteed by the Department of Veterans Affairs has sparked a "bidding war" for VA underwriters, according to a top executive with Wells Fargo.
"We have a challenge finding VA underwriters," said David Gibbons, the national VA mortgage program manager for Wells Fargo Home Mortgage, in an interview.
He noted that many VA underwriters work as contractors and will jump to another shop when offered higher pay. To keep up with production, he said Wells Fargo is training its FHA and conventional loan underwriters to do VA loans.
Wells Fargo, along with other lenders, has been easing underwriting standards and overlays on VA loans, which is helping to fuel originations.
"In the past year, we have definitely relaxed almost the majority of our overlays," said Latonia Donaldson, the vice president of PrimeLending in an interview.
She said the reduction in overlays applies to VA loans as well as other mortgage purchase loans.
Citibank has also recently changed its pricing, according to Elizabeth Robertson, the bank's business manager for special programs.
"That will definitely increase VA production at Citibank," Robertson said at the conference on Monday.
She also noted that Citi is relaxing its overlays on FICO scores and loan-to-value ratios on VA and other retail loans.
Bank of America is currently reviewing its VA program and product guidelines.
This assessment will outline "what we need to do to be responsible and responsive," said Dottie Sheppick, an affordable housing and strategic relationships executive at B of A.
