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Loan Underwriters

History

Lending practices can be traced back to the earliest human civilizations—including the ancient Greeks, Babylonians, Romans, and Chinese.

In the United States, the first bank—the Bank of North America—was chartered in 1781. It was established to print money, purchase securities (stocks, bonds, and options) in companies, and lend money to both the public and the private sector.

The first car loans were made by the General Motors Acceptance Corporation in 1919. Mortgages (at least the version of them we know today) became available in the 1930s, and federal government–backed student loans were first offered in the 1950s. Demand grew for underwriters as the number, types, and complexity of loans increased.

In more recent times, the collapse of a housing bubble starting in mid-2006 led to mortgage delinquencies and foreclosures and the devaluation of housing-related securities—prompting the Great Recession. Housing prices and the value of the U.S. stock market fell, more than 9 million people lost their jobs between 2008 and 2009, and the number of personal and business loan requests declined. In 2010, the Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into law to address some of the root causes of the Great Recession, and the U.S. economy gradually stabilized, banks became more apt to lend money, and consumers and businesses began to regain confidence in the banking system. More stringent underwriting standards initiated after the Great Recession/housing bubble have increased the job responsibilities of loan underwriters (especially those involved in reviewing mortgage applications) and fueled employment demand. 

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