'Second Look': First Aid for Borrowers
Author: Ruth Simon</br></br>When a borrower hears a "no" from the bank, sometimes it really means "maybe."</br></br>Many of the biggest U.S. banks, criticized since the financial crisis erupted for making fewer loans and toughening borrowing standards, have launched what industry officials call "second look" programs to review rejected loan applications.</br></br>Some bank employees hunt for credit-report errors that hurt borrowers the first time their applications were vetted, or unreported sources of income that would make a consumer loan look less risky. Even more common are reviews of rejected small-business loans by loan officers and other bank employees.</br></br>The moves are a throwback to traditional roll-up-the-sleeves loan underwriting, emphasizing a potential borrower's track record and relationship with a bank over credit scores and other data that powered the industry's loan machine when credit was fast and cheap.