Sanjiv Das became the CEO of CitiMortgage in July 2008, but we all know him as the CEO of Caliber Home Loans, a top 5 mortgage lender.
Das authored this opinion piece in MarketWatch commemorating the 10-year anniversary of the credit crisis.
In the piece, he notes that both tight housing supply and rising interest rates will continue to stifle mortgage applications in the near future.
His concern is that lenders will begin to lower lending standards in order to drive up their purchase mortgage business:
“With mortgage applications declining, executives have a choice to make: Should underwriting standards be lowered? When volume becomes the defining metric for how loan officers and mortgage companies get paid, then loan quality deteriorates — and we’ve seen how that movie ends. We in the industry should be mindful not to take shortcuts or return to suspect practices. Those who managed through the great financial crisis won't have to think twice about making the right decision.”
In order to combat this temptation, Das calls for higher levels of communication between banks and nonbanks, alike.
"As a banker and now as a non-banker, I have come to recognize the importance of looking across the entire industry to identify systemic risks. As the CEO of the third largest non-bank financial company (NBFC) in the mortgage business, Caliber Home Loans, I realize how important NBFCs are to the housing and broader financial services industry. NBFCs now originate about 50% of all new mortgages and have cast a wider net of credit across a broader spectrum of borrowers. We have had a positive experience in providing credit to individuals who have been neglected by larger lenders, as borrowers have demonstrated their ability to repay."