An automated approval approves your situation as-is, without needing to make any changes. After you provide the documentation the loan officer needs to have an underwriter review, it'll be reviewed by that underwriter to verify the information inputted into the automated underwriting system is indeed the information that you have provided - if not the information is changed to what you've provided and automated underwriting is re-run to see if the outcome is the same (approved). The underwriter also adds a layer of common sense to the loan, an automated underwriting approval will approve some situations that an underwriter will not, such as an unreported foreclosure on credit, someone buying a $50,000 home as their primary residence when they own a home worth $200,000 next door, etc. If the lender has their own overlay guidelines to FHA, such as cannot have more than 1x60 or 2x30 lates in the past month, and you do, then the underwriter will decline the loan. If the lender doesn't have their own overlay guidelines, the underwriter could still make a judgment call, but it's a good chance the late payments will be OK. You probably have some sort of compensating factors, either some savings/assets available after closing, a low debt to income ratio, or maybe even a larger than required down payment or amount of equity.
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
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