Get to know automated underwriting systems (AUS)

Get to know automated underwriting systems (AUS)

Systems Matrix

Agency
Name
Acronym
Fannie Mae
Desktop Underwriter
DU
Freddie Mac
Loan Prospector, Loan Product Advisor
LP
USDA Rural Housing
Guaranteed Underwriting System
GUS
FHA
Technology open to approved lender scorecard
Total Scorecard

Credit Risk Factors

  1. Credit History
  2. Delinquencies
  3. Mortgage Accounts
  4. Revolving Credit Utilization
  5. Public Records
  6. Collections
  7. Credit Inquiries

Non-Credit Risk Factors

  1. LTV/CLTV/HCLTV
  2. Liquid Reserves
  3. Loan Purpose
  4. Loan Term and Amortization
  5. Total Expense
  6. Property Type
  7. Co-Borrowers

DU Recommendations

Approve: indicates the loan satisfies Fannie Mae’s credit risk standards.
Eligible: indicates the loan satisfies Fannie Mae’s loan eligibility criteria.
Ineligible: indicates the loan does not satisfy Fannie Mae’s loan eligibility criteria.
Refer with Caution: indicates the loan does not meet credit risk or loan eligibility standards and is ineligible for delivery to Fannie Mae.
Out of Scope: indicates DU is unable to underwrite the loan file as submitted.

LP Recommendations

Accept: indicates the loan satisfies Freddie Mac’s credit risk standards.
Caution: indicates the loan is unlikely to meet Freddie Mac’s eligibility requirements due to excessive layered risks.
Streamlined Accept: allows for reduced documentation.
Standard: the most comprehensive level of documentation and is required for higher risk loans.
Ineligible/Incomplete/Invalid: LP is unable to underwrite the loan as submitted.

    • Related Articles

    • Get to know the credit report

      Mortgage lenders use the Residential Mortgage Credit Report or a Tri-merge Credit Report for qualification. The 3 Credit Repositories: Equifax (EFX) Experian (XPN) Transunion (TUC) The “Mid” or middle score of the 3 is used to qualify. Payment ...

    • FHA exceptions for multiple FHA loans

      Policy Exceptions Eligibility Requirements Relocation A borrower may be eligible to obtain another FHA-insured mortgage without being required to sell an existing property covered by an FHA-insured mortgage if the borrower is relocating, and ...

    • When Tax Returns are Necessary

      Federal income tax returns are required when one or more of the following income sources are being used to qualify: Commission earnings that amount to 25% or more of the borrower’s total employment income; Employment by family member(s) or an ...

    • How to Calculate Overtime, Bonus and Commissions

      Overview Overtime, Bonus and Commission income are considered variable income sources. These sources of income normally vary from month to month, and receipt of these is usually dependent of a number of factors. This type of income must be verified ...

    • Appraisal Conditions

      If the Appraiser cannot determine that a Property meets FHA’s MPR or MPS, an inspection by a qualified individual or entity may be required. Conditions that require an inspection by qualified individuals or entities include: standing water against ...