The Underwriting Scales of Justice

Written By: Theresa Furzland

As I was going through some of my old paperwork the other day, getting ready to move my office, I came across this old gem. Dating before credit scores, these Scales of Justice are just as important today and so I thought I’d share them with you.

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Compensating Factors:

1. Perfect Credit
2. Excellent Long Term Credit
3. Substantial Reserves & Liquid Assets
4. Situation Permits Lower Living Costs than Normal Expanding Household.
5. Long Term Employment
6. Mortgage Term Is Less Than Maximum
7. Temporary Income, Not Considered Stable And Continuing Available To Meet Short Term Nonrecurring Expenses
8. Limited Credit User
9. Benefits Not Reflected in Income But Directly Affecting Repayment Ability
10. Little or No Increase in Housing Expense
11. Low Loan-To-Value Ratio
12. Low Debt Ration
13. High Residual Income
14. Value and Marketability of Property Well Established By

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Non Compensating Factors:

1. Poor Credit Performance
2. Heavy Credit User
3. Minimal Assets for Closing
4. Gift Letter Being the Bulk of Assets
5. Short Time on the Job
6. Married People Where Spouse is Not on the Loan
7. Non-Arms-Length Relationships, i.e., Real Estate Broker is Current Landlord Completing VOR
8. Maximum Loan-To-Value Ratio
9. Adverse influence on Property
10. Lack of Thrift
11. Large Increase in Housing Expense
12. Difficult to Determine Value & Marketability of Property Because of Weak Comparables on Appraisal

About The Author

Theresa Furzland - As an NAMP® staff writer, Theresa Furzland serves as an instructor for Loan Processor University ( Theresa has 25+ years of experience ranging from origination, processing, closing and post closing. She is currently a producing Branch Manager for LendSmart Mortgage, LLC and own and operate Willow Wood Mortgage Services, Inc. If you're interested in becoming a writer for NAMP®, please email us at:


Opinion-Editorial (Op-Ed) Disclaimer For NAMP® Library Articles: The views and opinions expressed in the NAMP® Library articles are those of the authors and do not necessarily reflect any official NAMP® policy or position. Examples of analysis performed within this article are only examples. They should not be utilized in real-world application as they are based only on very limited and dated open source information. Assumptions made within the analysis are not reflective of the position of NAMP®. Nothing contained in this article should be considered legal advice.