How Automated Underwriting Systems Work - Podcast

How Automated Underwriting Systems Work

Show Notes

Automated underwriting systems (AUS) are used by all traditional lenders to determine your eligibility for a home mortgage.

The danger with “automated” underwriting is that there is no real filter to determine whether or not the information being input into the system is accurate.

Most borrowers will not have to worry about automated underwriting issues.  If you have anything out of the ordinary with your application like changes in employment or income, not-so-perfect credit, past financial hardship or any other number of things, you will want to make sure you’re working with an experienced loan officer with underwriting guideline experience.

Links and Resources

This topic covers Conventional, FHA, VA and USDA automated underwriting systems.  Both Fannie Mae and Freddie Mac automated underwriting systems can process Conventional, FHA or VA approvals.

This episode of the podcast was inspired by the following article:

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About the Author

Scott Schang

A 20+ year veteran of the Mortgage and Real Estate industry, I am passionate about educating and empowering consumers. I have been writing about consumer protection issues and making sense of complicated real estate and mortgage topics on this website since 2007

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  • Trish says:

    Hello I own a home outright and looking at buying second home I have 70% down so I don’t want a appraisal my lender is insisting on appraisal

    • Hi Trish, 70% down on a second home surprises me that you are not getting an appraisal waiver. I would definitely get a second opinion. You are only going to get the waiver if you are using conventional financing. We typically run the loan through both Fannie Mae and Freddie Mac automated underwriting systems to see if either one or both offer the inspection waiver.

      It sounds to me like this could be an overlay from the bank you’re working with. I suggest a second opinion. If you would like, shoot me an email to scott@findmywayhome.com and let me know what State you’re in. I can introduce you to an experienced mortgage broker friend of mine that I know and trust.

      Hope this helps?