Introduction
In the mortgage industry, certain phrases get repeated so often they begin to lose their meaning. One of the most overused—and underexplored—is “common-sense lending.” It sounds reassuring. Practical. Safe. But scratch the surface, and you’ll find that few people can define it clearly, much less apply it consistently.
Is it just flexible underwriting? A willingness to look beyond black and white for the guidelines? Or is it a return to something more fundamental—a way of thinking rooted not just in policy, but in principle?
To truly understand what common-sense lending means today, we have to step back and look at the origins of the phrase itself. The idea of “common sense” goes far beyond marketing slogans and quick approvals. It traces back to ancient philosophy, revolutionary political theory, and even modern culture wars. It has been used to promote democracy, justify populism, and now—perhaps most importantly—guide decision-making in fields where nuance matters.
In the context of mortgage lending, common sense should represent a borrower-first mindset: one that honors real-world financial behavior and emphasizes reasoned judgment over rote checklists. It’s about recognizing the difference between being cautious and being closed-minded.
This article explores the rich history and evolution of common sense—from Aristotle and Thomas Paine to today’s mortgage playbooks—and makes the case for why brokers and lenders alike must reclaim it as a powerful tool for serving clients more humanely, intelligently, and effectively. Because when used properly, common-sense lending isn’t just a phrase—it’s a philosophy.
The True Origins of “Common Sense”
To understand what “common-sense lending” should mean, we first need to understand where the phrase “common sense” comes from—and what it originally represented.
The earliest roots of the concept trace back to Ancient Greece, where the philosopher Aristotle described a mental faculty that allowed humans to unify and interpret input from all five senses. This he called koine aisthesis—a “common perception” that allowed individuals to make sense of the world. It wasn’t “common” in the sense of being basic or average—it was shared, unifying, and vital to rational understanding.
The Romans adopted and expanded this idea. Cicero, a renowned statesman and thinker, translated it into Latin as sensus communis. But Cicero’s interpretation leaned more toward moral and civic judgment—a sense of ethical reasoning that all rational people in a society could agree upon. In Roman public life, sensus communis was the glue of good citizenship, reflecting values like fairness, decency, and collective responsibility.
As the concept evolved through the centuries, it entered legal, political, and economic discourse across Europe. In courts and civic forums, “common sense” came to mean the ability of an ordinary person to make sound, reasonable decisions without specialized knowledge. This idea was especially powerful in common-law systems, where jurors and judges were expected to interpret cases using judgment that aligned with societal norms and shared values.
So, from its earliest days, common sense was never about oversimplification. It was about shared wisdom, grounded in reality, and universally accessible.Top of Form
Thomas Paine and the Revolutionary Power of Common Sense
In 1776, an English-born political writer named Thomas Paine published a slim, fiery pamphlet that would forever change the course of history. Titled Common Sense, it made the radical argument that the American colonies should break away from British rule. But it wasn’t just what Paine said that electrified the public—it was how he said it.
Unlike most political writing of the time, which was filled with legal jargon and classical references, Common Sense was written in plain, powerful language that any literate person could understand. Paine took complex ideas about governance, monarchy, and natural rights, and translated them into everyday logic. He framed independence not as an academic theory, but as a self-evident truth—something obvious to anyone who applied basic reason.
By doing so, Paine democratized political discourse. He showed that profound change doesn’t require elite education or institutional power—just clarity, conviction, and an appeal to shared judgment.
This same principle applies to mortgage lending. Underwriting shouldn’t be a privilege reserved for borrowers with perfect credit, W-2s, and clean tax returns. It should be accessible, rational, and just, reflecting the true financial reality of the borrower—not just what fits neatly into a standardized box.
Like Paine’s vision for governance, common-sense lending invites us to look beyond rigid structures and trust in reason, fairness, and the idea that good judgment can—and should—live outside traditional norms. It’s about creating a system where more people can participate and thrive, not just those with perfect profiles.
The Politicization of Common Sense in America
While “common sense” began as a term rooted in shared wisdom and rational judgment, over time it became increasingly politicized—especially in American discourse. What once represented thoughtful, collective reasoning gradually morphed into a rhetorical device used to promote simplicity over nuance.
In the late 20th century, politicians across party lines began to embrace “common sense” as shorthand for populist ideas. From Bill Clinton’s calls for “common-sense welfare reform” to George W. Bush’s push for “common-sense tax cuts,” the phrase became a political tool—meant to appeal to voters tired of complexity, bureaucracy, and perceived elitism. The implication was that experts had failed and that ordinary intuition should take precedence over data or deliberation.
This politicization has diluted the original meaning of the term, making it harder to distinguish between thoughtful simplicity and strategic oversimplification. But for mortgage professionals, reclaiming the true spirit of common sense is essential. In lending, it shouldn’t mean bypassing due diligence—it should mean making informed, ethical decisions that serve real people based on real-world logic. It’s time to separate the philosophy from the politics.
Reclaiming Common Sense in Mortgage Lending
In today’s mortgage marketplace, it’s time to reclaim common-sense lending for what it truly is—not a marketing gimmick or political catchphrase, but a thoughtful, borrower-focused approach grounded in practical reasoning and sound financial judgment.
Common-sense lending is not about “making exceptions” or “cutting corners.” Instead, it’s about recognizing that one size does not fit all—especially in a world where borrowers come from increasingly diverse financial backgrounds. It acknowledges that real people don’t always fit neatly into automated underwriting systems, and that income verification can’t always be reduced to a single line on a tax return.
At its core, common-sense lending prioritizes a deep understanding of the borrower’s ability to repay, even when that ability is demonstrated through alternative documentation. It relies on qualified underwriters understanding how a borrower’s full financial picture supports the loan request.
This approach is especially critical in the Non-QM space, where flexibility is built into the product but responsibility must remain central to the process. Whether it’s bank statement loans for the self-employed, DSCR loans for property investors, or foreign national programs for globally active borrowers, common-sense underwriting ensures that decisions are made intelligently—not rigidly and aligns with the original vision of the Non-QM space.
By reframing the term with its historical integrity and modern relevance, lenders and brokers can offer smarter, more inclusive solutions that reflect how people actually live and earn today—while still protecting the soundness of the loan and the long-term health of the housing market.
Common-Sense Lending in Action: Real-World Scenarios
Let’s look at three examples that illustrate how this philosophy plays out.
Scenario 1: The Self-Employed Entrepreneur
A business owner has excellent revenue and strong bank statements, but aggressive tax deductions show a net income too low to qualify traditionally. A common-sense lender uses 12 or 24 months of deposits to demonstrate actual income, validating the borrower’s financial strength.
Result: Home purchase approved—without compromising on ATR (Ability to Repay) standards.
Scenario 2: The Real Estate Investor
A seasoned investor wants to refinance a cash-flowing duplex using a DSCR loan. A traditional lender might balk at the property being non-owner occupied. But a common-sense approach uses the Debt-Service Coverage Ratio to qualify based on rental income, not W-2s.
Result: The deal gets done based on the asset’s performance—not the investor’s personal income.
Scenario 3: The Foreign National with Global Assets
An international buyer wants to purchase a vacation property in Florida. They have no U.S. credit history, but they have significant verified reserves, a clean international credit report, and consistent earnings.
Result: The borrower qualifies through an 80% LTV Foreign National program, showing how common sense accommodates global borrowers with real means.
Why Common-Sense Lending Isn’t “Loose” Lending
It’s a common misconception that flexible underwriting automatically means riskier lending. But common-sense lending is not about relaxing standards—it’s about applying relevant, rational judgment to the borrower’s full financial picture. This is context-aware lending, not careless credit decisions.
Unlike “loose lending,” which may ignore red flags or inflate borrower qualifications, common-sense lending digs deeper. It uses alternative documentation like bank statements, profit and loss statements, or rental income to assess a borrower’s true ability to repay. It looks at patterns, reserves, and overall financial health rather than relying solely on one metric like a credit score or tax return.
In many cases, common-sense underwriting is actually more thorough than traditional methods. It demands skilled underwriters who can evaluate complex files, spot inconsistencies, and make informed decisions that balance flexibility with financial responsibility.
This isn’t a return to the pre-2008 mistakes—it’s a deliberate move toward intelligent lending that aligns with how people earn, save, and invest today. By applying modern tools with timeless judgment, brokers and lenders can serve a wider range of borrowers without compromising loan quality. That’s not a risk—it’s a smart, ethical way forward.
The Foundation of Lending Should Be Judgment, Not Just Algorithms
In a market flooded with buzzwords, it’s easy for “common-sense lending” to get lost in the noise. But when you peel back the political baggage and marketing gloss, what’s left is something powerful—a call to return to lending with integrity, empathy, and real-world reasoning.
True common sense has always been about more than just instinct or simplicity. It’s about ethical judgment, practical thinking, and a shared commitment to doing what’s right—not just what’s easy. In the mortgage industry, this means building systems that accommodate the complexities of modern life: self-employment, entrepreneurial income, multiple property investments, and global borrowers who don’t always fit traditional molds.
As mortgage professionals, brokers have an opportunity—and a responsibility—to lead this charge. Common-sense lending shouldn’t be treated as a niche product offering. It’s not just for Non-QM or “hard-to-qualify” borrowers. It’s a mindset. A guiding principle. One that insists every borrower deserves to be evaluated with fairness, logic, and care.
At Foundation Mortgage, we believe this philosophy is more than a differentiator—it’s our DNA. Common-sense underwriting is not the exception here—it’s the Foundation. We encourage brokers to embrace this approach, to advocate for borrowers who deserve thoughtful solutions, and to build their businesses on trust and reason.
Because in the end, lending isn’t just about numbers—it’s about people. And helping more of them achieve homeownership starts with bringing true common sense back to the table.
Conclusion: Lending That Honors Paine’s Legacy
When Thomas Paine published Common Sense, he challenged a world ruled by rigid systems and inaccessible power. He believed that truth and fairness didn’t belong only to the elite—they were the birthright of everyday people. Today, mortgage brokers and lenders have a similar opportunity to shift the narrative in our industry.
Common-sense lending isn’t about shortcuts—it’s about clarity, fairness, and meeting borrowers where they are. It’s a commitment to understanding real financial lives, not just checking boxes. It means looking beyond traditional documentation to assess a borrower’s ability to repay with thoughtful, case-by-case judgment.
By embracing this approach, we make lending more human. We expand access to homeownership, strengthen client relationships, and reinforce trust in our profession. In a landscape often dominated by automation and rigidity, common-sense lending reintroduces the very thing that made the American dream possible: rational, principled decision-making.
So let’s stop using “common sense” as a slogan and start living it as a standard. Let’s build a mortgage future that’s not only profitable, but meaningful—one where reason and responsibility guide every deal, just as Paine envisioned for democracy itself. Because lending with integrity isn’t revolutionary—it’s just the right thing to do.
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