Background

• The underwriter is the person who has the final say on whether the loan is approved or not. She is the one who receives the completed file and reviews the contents to ensure that the loan documentation and the borrower's qualifications meet the guidelines for the chosen loan program. All loans involve an underwriter, though the amount of work and decision-making she has to do depends on the individual loan file. While she has the file under review, the loan is being "underwritten." This process can take from one to five days, depending on loan volume.
  
  

Loan Process

• There are several steps involved in processing a mortgage. The loan officer meets with the borrowers and prequalifies them. She then takes the application and initial documentation and sends the loan to the processor. The loan processor makes sure that the file and the information it contains is complete. She orders all the supporting loan documentation, including the appraisal and verifications of employment and deposit. After the file is in order, she hands the file to the underwriter.
  
  

Automated Underwriting

• The underwriting process typically begins with the input of data into an automated underwriting system by the loan processor or loan officer. This computer program takes the application data, such as income, credit information, debt and assets, and compares them to the guidelines of the chosen program. If the loan data fits the guidelines, the system will give an approval. If it does not, the system will either deny the loan or send it for manual underwriting.
  
  

Automated Approval

• On a file that has automated approval, the underwriter checks to make sure that all the necessary documentation supports the data inputted into the system. If the documents do not match the data, the underwriter will give a conditional approval that will hinge on gathering additional information or documentation that brings the loan back in line with the guidelines. This includes a review of the appraisal. Once everything matches, the underwriter gives final approval for the loan.
  
  

Manual Underwriting

• On manually underwritten loans, the underwriter solely decides if the loan should be approved. Manual underwrites are most common with government loans such as Federal Housing Administration (FHA) or Veterans Administration (VA) loans, because they leave more gray areas for exceptions. The loan processor will do his best to make sure that any anticipated information is present in the file before it is underwritten. However, in manually underwritten files, the underwriter often has questions or needs additional documentation before she can make a decision. Until she is satisfied, she will not give final approval.