“Is My Home Loan Underwritten by a Person or a Computer??” I understood the borrower’s question. The answer is, in North Carolina, your mortgage loan will be underwritten, or approved, by BOTH a computer system and a real person. The Computer Program used to approve loans is call an Automated Underwriting System – or AU. The Automated Underwriting is performed on every mortgage these days whether you know it or not.
Think about this – in 2010 we had over 395 changes to mortgage loan guidelines. There are too many variances for a loan officer to know by heart any more! The Computer Automated Underwriting can be done upfront when you make loan application or later when the mortgage is submitted to underwriting. (Usually it’s done at BOTH times, because obviously, it is much better to know upfront instead of wondering if you are approved farther into the process!)
Automated Underwriting Definition
Automated mortgage underwriting is when a computer takes in all your qualifying information along with your loan program and spits out an approval or a denial based on what it saw. f you are approved, the automated underwriting computer tells you what documentation is needed for final approval and closing. If it was a denial, it tells you why you were denied. The actual VERIFICATION of the information put into the Computer Automated Underwriting system is done by the Loan Officer, Processor, Underwriter and Closer (meaning a bunch of different folks are going to be verifying the documents).
Even though every mortgage (barring a very small handful) gets runs through a computer, it is not always the same computer system. Fannie Mae automated underwriting has all of Fannie Mae’s guidelines and was developed by them to underwrite their loans. FHA automated underwriting is a totally different computer system developed only for FHA approvals. Freddie Mac has it’s own system – and the system used to underwrite USDA Home Loans is called GUS.
The Computer Automated Underwriting System is simply looking to see if the numbers we input meet the guidelines that it has. If so, you get a big thumbs up… if not, it’s not a complete denial (usually). The system will give us a list of items we need to review, change, update, or redo and try again. I’ve updated information for a single file 21 times before I got it approved! (Paid off a truck, added a wife to the loan and made a larger downpayment!)
So, if you hear us talking about the Automated Findings, or the Automated System – that’s what we are talking about. It’s part of the new Underwriting Team!
If you are considering a home purchase in NC, and want the BEST mortgage interest rates, and the BEST Chance of getting your mortgage loan approved – call Steve and Eleanor Thorne, NC Mortgage Loan Experts! 919-649-5058