Automated Underwriting System Approval: AUS Findings

This BLOG On Automated Underwriting System Approval: AUS Findings Was UPDATED On July 16, 2017

The automated underwriting system approval is one of the major changes that have developed in recent years in the mortgage industry.

  • The automated underwriting system is the use and utilization of computers to underwrite mortgage loans. 
  • The automated underwriting system approval, also known as AUS, have made mortgage approvals automated and faster and can grant mortgage approvals in a matter of minutes.

Underwriting Process

The mortgage underwriting process is the process of evaluating a mortgage loan applicants creditworthiness and their ability to repay a mortgage loan by analyzing the applicant’s income, debts, and credit history.

  • Prior to automated underwriting systems, initial mortgage pre-approvals were done by people and took some time in order to render an approval. 
  • However, a mortgage approval can be issued in a matter of minutes when a mortgage loan originator inputs all pertinent data into the automated underwriting system approval.

Fannie Mae And Freddie Mac

The Federal National Mortgage Association, also known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, are the two largest mortgage investors in the nation.

  • Each of these giant mortgage investors have created and developed its own automated underwriting systems approval for evaluating home mortgage loans. 
  • Fannie Mae has developed the DU, which is known as the Desktop Underwriter.
  • Freddie Mac’s version of their automated underwriting system is known as the LP, the Loan Prospector. 
  • These two systems is equivalent to a brain and has the ability to determine and analyze each mortgage applicant’s risk factor.
  • Evaluation of risk assessment by AUS is done by evaluating the inputted data and the applicant’s credit scores and credit history. 
  • The automated underwriting system approval determines whether an applicant is approved or not by issuing a AUS Findings Report. 
  • The report states whether the applicant is approved eligible or not. 
  • If approved eligible, the Findings Report will indicate what documents is required to verify the application data.

Importance Of Automated Underwriting Systems

Almost all mortgage lenders will go by the Findings report of the AUS initially. Lenders with no lender overlays will just go off the AUS Findings Report. However, if mortgage lenders have lender overlays, they will initially go off the AUS Findings and will do a manual overview to see if the borrower meets their particular mortgage lender overlays. If it is not approved by the automated underwriting system, the chances are that it needs to be downgraded to a manual underwrite. Not all mortgage lenders will do manual underwriting. All Findings, whether done at one lender or another, will render the same result.

  • Most mortgage lenders will halt the mortgage process and will not to submit a file that is not AUS approved. 
  • Many mortgage lenders will not manually underwrite a mortgage loan. 
  • All automated underwriting system approved files are manually verified by humans.
  • The loan officer will make sure that all documentations, credit, income, assets, liabilities are correct before it is submitted to AUS.
  • Proper documentation will be required to verify all data that was inputted into the computer to get the AUS approval.

No Lender Overlay Mortgage Lenders

Mortgage loan applicants who have been initially been approved by an automated underwriting system approval and can provide the documents to verify the information on mortgage application, the chances are great that your mortgage loan will close.

Mortgage Borrowers who are looking to get qualified with a lender with no lender overlays, please contact us at 1-800-900-8569 or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays.

Related> Automated Underwriting System: Case Scenario

Related> Manual Underwriting

Related> Fannie Mae Automated Underwriting System 

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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