What Is Automated Underwriting

Dated: 10/30/2018

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What is Automated Underwriting


Automated Underwriting

After you complete your loan application with a lender, it is sent to “underwriting” for review. In short, underwriting is the process used to analyze how you have managed credit obligations in the past, whether you have the ability to repay the mortgage loan you are applying for (i.e., your income and assets), and whether the price you are willing to pay for the home is supported by the price of the property.

Automated underwriting is a technology driven underwriting process that provides a computer generated loan decision. The lending industry is broadly migrating to the use of new technology driven loan underwriting platforms to improve the processing time for all types of loans.

Computer generated mortgage loan underwriting decisions are the most common way to get approved for a home mortgage.

Information from a mortgage loan application (Fannie Mae form 1003) is uploaded to an automated underwriting system (AUS) which retrieves relevant data, such as a borrower’s credit history, and arrives at a logic-based loan decision.

Automated underwriting engines can provide near-instantaneous loan approval or denial decisions based on the information submitted to the system.


What happens if you cannot get an automated underwriting approval?  Assuming that the lender input all of the data accurately, the automated decision will be pretty clear as to what factors it determined to be too risky to produce an Approve/Eligible decision.  This guidance can be used to determine the best course of action for receiving an approval.

Sometimes you will get an automated approval based on your lender being able to explain certain things about your application.  This is very common when there is a financial hardship in the past including bankruptcy, foreclosure, short sale, or deed in lieu of foreclosure.

False approvals can happen when your loan officer inputs information that cannot be documented.  On the other hand, False denials can also happen when your loan officer inputs inaccurate, or incomplete information into the automated underwriting system.



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