Questions about automatic underwriting

[Anonymous]

1.  How often is this used (what percentage)

2.  Does anything else go into this decision process besides just the credit score?

[Anonymous]

BUMP

[sh9730]

Not an expert, but just going into the process myself have been reading about this stuff....in addition to the score they look at Debt to Income ratio of the NEW housing payment, your total DTI (including credit cards, auto loans etc), value of the property, and the actual credit report...not score only...  Then it spits out an APPROVE or REFER.....a refer doesnt mean you wont get a loan...just means there needs to be more review....

[Anonymous]

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sh9730 wrote:

Not an expert, but just going into the process myself have been reading about this stuff....in addition to the score they look at Debt to Income ratio of the NEW housing payment, your total DTI (including credit cards, auto loans etc), value of the property, and the actual credit report...not score only...  Then it spits out an APPROVE or REFER.....a refer doesnt mean you wont get a loan...just means there needs to be more review....

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I knew that.  Automatic underwriting is when the lender does no look at your credit report in detail to make the decision if you are credit worthy.  If there is not automatic underwriting, the lender may question why did you have a late in 2007, even though your score may be 700.  I dont want anyone looking at my errors and corrections.  I only want the approval based on my score of upper 600's.  I have has a foreclosure and two BK's in the past and would prefer it not known by thelender.  So how often does this process happen.

[Anonymous]

Automatic underwriting is usually the first review the lender does of the file it is either done by a broker or loan officer to determine if, based on the information inputed into the system, wether or not it fits the companies general guidelines for approval.  One of the questions on every single Automatic Underwriting Engine is have you declared BK in the last 7 years, another question on every single AU engine is have you had property forclosed upon in the last 7 years, you can say no, and if everything else is good then you will get an approval.  If you say yes it is an automatic decline/referral PERIOD.  But let's just say you say no and get the approval, this is just a general approval based on information entered into an underwriting engine.  All this need to be verified and cleared by the processor or underwriter once the loan makes it throug the AU engine and is registered and submitted.  Just because you got an AU approval does not mean the underwriter is not going to look at the details on your credit report they still review every file. 

[sh9730]

In other words (as the last post says) you MUST tell your lender about the credit history and they will have access to your entire report. Also, not disclosing on the mortgage application can be considered fraud.  

Of course you didnt provide any details (and dont have to if you dont want!!) but I read all the time about people getting mortgages approved post BK?  Unless its recent....

Anyway....dont think its something you can hide from.....even with AU...

NOW, in my situation I am also hoping for AUS approval (my scores are 700+) as I have one really old (almost 7 years)collection account that is large, and from what I ve read it is EASIER to be approved with the AUS approval, but even then it takes it into account. (like spits out APPROVED, collection does NOT have to be paid if it does not affect title, or something to that affect).   BUT, the underwriter may (and probably will in my case) want me to write a letter of explanation so they can feel comfortable that my risk level TODAY is acceptable.   

[Anonymous]

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sh9730 wrote:

In other words (as the last post says) you MUST tell your lender about the credit history and they will have access to your entire report. Also, not disclosing on the mortgage application can be considered fraud.  

Of course you didnt provide any details (and dont have to if you dont want!!) but I read all the time about people getting mortgages approved post BK?  Unless its recent....

Anyway....dont think its something you can hide from.....even with AU...

NOW, in my situation I am also hoping for AUS approval (my scores are 700+) as I have one really old (almost 7 years)collection account that is large, and from what I ve read it is EASIER to be approved with the AUS approval, but even then it takes it into account. (like spits out APPROVED, collection does NOT have to be paid if it does not affect title, or something to that affect).   BUT, the underwriter may (and probably will in my case) want me to write a letter of explanation so they can feel comfortable that my risk level TODAY is acceptable.   

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SH9730 you missed the point.  Have you heard of stated income?  That is not entirely disclosing everything and is not yet illegal.  Not something I would use since I am confortable with my income.  I guess you do not understand what I am entirely saying.  I am not trying to defraud anyone.  Just want the level of detail looked at limited.  I want my approval based on the new me instead of the old me.  Let me break it down so you will understand better I was told that there is a computer generated system called automatic underwritng  that can reject you before it gets to an actual human- being.  Some use the system where it goes directly to a human being called manual underwriting.   I was wondering what percentage of underwriting is manual and what percentage is automatic.   That is all I am asking.

[sh9730]

Well, this is the last post on this for me (not in the mood to argue when its not neccessary).  Yes, I ve heard of Stated income, (and Stated Assets and VOE only, and all the other programs available in the mortgage world most of which are MUCH harder to get these days although not impossible). In my view those programs are NOT the same as what you were discussing. Those programs (at least if entered into honestly) do not surpress prior credit issues.

BUT, to answer your question, from what I understand (and as I said in my first post I am NOT an expert but have been reading and learning an awful lot about this stuff of late), almost every single loan file at least starts by trying to get AUS approval (as mortgage solutions stated).  BUT, the percentage that then gets manually underwritten even after it has an AU approval?  Couldnt tell you for sure...

[Anonymous]

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sh9730 wrote:

Couldnt tell you for sure...

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I was not trying to argue.  But thank you for your answer anyway.