Refer Eligible Per Automated Findings

What If You Get A Refer Eligible Per Automated Findings

The Automated Underwriting System is a sophisticated mortgage underwriting system that analyzes a mortgage loan application of a mortgage loan borrower. The Automated Underwriting System, also known as AUS, will analyze the mortgage loan borrower’s credit scores, the borrower’s credit payment history, the borrower’s credit tradelines, the borrower’s delinquent accounts, the borrower’s public records such as judgments, bankruptcies, foreclosures, short sales, deed in lieu of foreclosure, tax liens, credit disputes on charge offs and non-medical collections, the borrowers outstanding collection accounts, the borrower’s charge off accounts, the borrower’s income, the borrower’s assets, and every single line item the mortgage loan borrower has stated on the 1003 mortgage loan application which includes the declaration page where it asks whether the borrower has owned a home before, had a prior bankruptcy or foreclosure, have any civil judgments against them, and if the mortgage borrower has any pending lawsuits. Within minutes of entering the financial and credit profile to the Automated Underwriting System, the AUS will render a decision: It will come out as Approve Eligible, Refer Eligible, or Refer Ineligibile.

Approve Eligible Per Automated Findings

Approve Eligible Per Automated Underwriting System means that the borrower meet all of the mortgage lending guidelines for the loan program, whether it is a FHA Loan, Conventional Loan, VA Loan, or USDA Loan. An approve eligible per automated findings means that the Automated Underwriting System has reviewed all of the borrowers credit and financial profile and it finds it that the borrower is approved via automated underwriting system on the loan program. The approve eligible per automated findings will come back with a list of items that for the automated approval to be valid that the mortgage loan borrower needs to provide. Examples of conditions requested by the Automated Underwriting System may be verification of rent , reserves, leases on departing properties, certain paperwork, written payment agreements, or collection accounts or judgments to be satisfied. Mortgage lenders with no lender overlays will just go off the approve eligible automated findings and will not have additional lending requirements. If you are looking for a mortgage loan officer who specializes in on mortgage loan programs with no lender overlays, please contact me at 262-716-8151 or email me at gcho@gustancho.com. I am available 7 days a week, evenings, weekends, and holidays to take your calls and answer all of your questions.

Refer Ineligible Per Automated Findings

Refer Ineligible Per Automated Underwriting System means that the borrower does not qualify for the particular loan program. Ineligible means that the mortgage loan borrower does not meet the criteria of the mortgage loan program. For example, a refer ineligible per automated findings will occur if a borrower has not met the mandatory waiting period after bankruptcy and/or foreclosure . FHA lending guidelines state that a borrower cannot qualify for a FHA Loan after a Chapter 7 Bankruptcy unless they had passed a two year waiting period after a Chapter 7 Bankruptcy discharge date. There is a three year waiting period to qualify for a FHA Loan after a foreclosure, deed in lieu of foreclosure, and short sale. There is no waiting period after a Chapter 13 Bankruptcy discharged date to qualify for a FHA Loan. There is a four year waiting period to qualify for a conventional loan after a Chapter 7 Bankruptcy, deed in lieu of foreclosure, short sale. There is a two year waiting period to qualify for a conventional loan after a Chapter 13 Bankruptcy discharged date. Those who have recently filed for a Chapter 13 Bankruptcy can qualify for a FHA Loan one year into their Chapter 13 Bankruptcy with the Chapter 13 Bankruptcy Trustee approval and as long as they can show they have made timely payments to their creditors for at least 12 months.

Refer Eligible Per Automated Findings

Refer Eligible Per Automated Findings means that the borrower does qualify for a mortgage loan, however, the automated underwriting system cannot render a decision and the mortgage loan application may need to be downgraded to a manual underwriting . Manual underwrites on FHA Loans are very common. All FHA manual underwriting files require verification of rent . Verification of Rent is only good and valid if and only if the renter can provide 12 months of canceled checks and they have been timely on all rental payments for the past 12 months. The borrower can also provide 12 months bank statements if they have been paying their monthly rental payments online via bank transfer from their account to their landlord’s bank account. If the renter has been renting their home or apartment from a registered property management company, then canceled checks is not required and a verification of rent form signed by the property manager of the property management company can be used in lieu of 12 months canceled checks or 12 months bank statements. I have not heard of any mortgage lenders that do a manual underwrite on conventional loans.

Refer Eligible Per Automated Findings: Conventional Loans

Since manual underwriting is mainly for FHA Loans, if you get a refer eligible per automated findings on conventional mortgage loan applications, downgrading it to a manual underwrite may not be an option. However, the mortgage loan originator can play around with the Automated Underwriting System where they can get the refer eligible per automated findings to an approve eligible. The mortgage loan officer can see if they add more reserves, or put down a higher down payment if the automated underwriting system will render an approve eligible per automated findings. If all else fails, maybe the borrower’s credit scores may need to get increased and after the credit scores improves, the mortgage loan originator may try running it through the automated underwriting system again.

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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