The Automated Underwriting System is a computerized mortgage underwriting system that analyzes a potential mortgage borrower’s application for a home loan and uses its parameters to automatically give an approval or denial. The Automated Underwriting System or AUS for short is set-up with certain criteria to abide by such as: borrower’s credit scores, borrower’s credit payment history, credit trade lines, delinquent accounts, borrower’s public records or judgments, bankruptcies, foreclosures, short-sales, deed in lieu of foreclosure, tax liens, charge-off or collection accounts, borrower’s income, borrower’s assets, and every line the borrower has stated on their Form 1003 Application including the declaration page. The declaration page on the 1003 Application has questions such as whether the borrower has owned a home previously, has declared bankruptcy or lost a home to foreclosure, has any civil adjustments, or if the borrower has any pending lawsuits. Since this is a computer generated system, within a minute or two of entering this information into the Automated Underwriting System, the AUS will give it’s finding of the credit profile put into the system which will be: Approve Eligibile, Refer Eligible, or Refer Ineligible.
When your data goes through the Automated Underwriting System and you are returned with an Approve Eligible response means that the borrower/application meets all of the lending guidelines for the loan program which they applied for: Conventional Loan, FHA Loan, VA Loan, or USDA Loan. The Approve Eligible means the Automated Underwriting System reviewed the credit profile and financial information and approved the application, however, a list of items will be returned from the AUS that need to be supplied in order for borrower’s loan to be processed. These items can include reserves, additional paperwork, verification of rent, collections accounts, etc. If the mortgage lender doesn’t have lender overlays, then the loan can be done with the Approve Eligible finding. If you are in need of a loan without lender overlays, please contact me at 888-900-1020 or firstname.lastname@example.org and I can start the approval process for your next home.
When the Automated Underwriting System returns with a Refer Ineligible means that a borrower does not qualify for the particular loan program. The Refer Ineligible can be returned for many reasons which include: Waiting Period for bankruptcy or foreclosure, credit score, reserves, assets, etc. The most popular reason for a Refer Ineligible is due to derogatory items on the borrower’s credit history or affect on the borrower’s credit score. As mentioned earlier, if you feel you received a Refer Ineligible due to lender overlays, then you need to reach out to me and we can go over minimum loan program requirements and get you approved properly.
The final response about a borrower’s application with the Automated Underwriting System is Refer Eligible. A Refer Eligible is sort of a gray area in the fact that normally this means that the Automated Underwriting System approved the file but only with a manual underwrite. If you are looking to get approved under a loan program that doesn’t allow for a manual underwrite, your loan officer can assist you in referring some items to change such as reserves on hand, down payment, or even wait for a higher credit score.
As you can see, the Automated Underwriting System does help with mortgage files since the loan program qualification criteria are already built in so that it prevents from a manual underwrite right away. A lot of mortgage lenders will rely on the Automated Underwriting System so that they won’t have to do manual underwrites. However, you may need a manual underwrite or a mortgage lender that doesn’t have lender overlays and if you are reading this article, you are in the right place! Please call me any time day or night and we can get started: 888-900-1020, email@example.com, or www.loanconsultants.org.