Many lenders DO NOT even offer the service of performing manual underwrites because they require additional work and are more prone to audits by Fannie Mae, Freddie Mac, or Ginnie Mae. Many manual underwrite lenders offer manual underwrites, but most of them prefer to only offer this service on government loans (FHA, VA, or USDA). A lot of times when a Veteran has higher Debt to Income ratios, lower credit scores and or past credit charge off or collection accounts a Manual Underwrite is necessary. A manual underwrite is when you do not receive an automated approval from Fannie Mae and Freddie Mac underwriting systems. Keys to a manual underwritten VA Loan.
All loans must meet Fannie Mae HFA Preferred or Freddie Mac HFA Advantage underwriting guidelines, credit eligibility, Loan to Value (LTV) and appraisal standards. All borrowers’ contributions toward the purchase must meet product. NO manual underwrite DREAM Freddie Mac HFA Advantage LTV - 95.01 to 97%.
VA Manual Underwriting Helps Military & Veteran Buyers. So, not everyone’s credit is perfect. Although many scenarios that may have a lower credit score, higher debt ratio, or other risk factor, it is often possible to get an automated preapproval. But, for borrowers that get a refer, a VA manual underwriting may help.
We Provide Same Day Manual Underwriting Pre Approvals! Many FHA mortgage applicants ask us what is an “FHA or VA manual underwrites” and what is needed to get a manual underwrite approved? It’s important for both loan applicants to understand what it means when a mortgage loan officer states that a loan requires a “manual underwrite”.
Manual Underwriting Versus Automated Underwriting Guidelines
This BLOG On Manual Underwriting Versus Automated Underwriting Guidelines Was UPDATED On May 23rd, 2019
The Automated Underwriting System is a sophisticated computer system that will render a decision on whether a mortgage applicant is approved for a mortgage loan based on the information from the 1003 and credit reports.
The Automated Underwriting System will take into account the mortgage applicants following information:
Income
Debt
Liabilities
Assets
Credit scores
Credit history
Public Records
Based on the information, the Automated Underwriting System will report its findings and can require conditions like the following:
Rental verification
Reserves
Assets
Whether or not gift funds can be used
Other mortgage conditions
Fannie Mae’s version of Automated Underwriting System is known as DU and Freddie Mac’s version is known as LP
Findings from the Automated Underwriting System are rendered as approve eligible, refer eligible, or refer with caution
Difference Between Manual Underwriting Versus Automated Underwriting Is Approve/Eligible Per AUS Findings
Manual Underwriting Versus Automated Underwriting is the Approve/Eligible is rendered on automated underwriting and refer/eligible is rendered on manual underwriting.
Refer eligible files are mortgage applications that are eligible for mortgage approval but is not approved due to certain factors that the automated underwriting system cannot render an automated approval
A mortgage underwriter needs to carefully review the borrowers file manually
Information such as the following needs to be reviewed carefully and analyzed by the underwriter:
Credit Scores
Overall Credit Payment History
Assets
Debt to income ratios
Other factors that the automated underwriting system cannot render an approve/eligible per AUS
Potential Reason For Refer/Eligible AUS Findings
There are multiple reasons why borrowers do not get an approve/eligible and the AUS renders a refer/eligible:
Refer with caution pretty much means a denial due to certain factors that do not meet Fannie Mae, Freddie Mac, or FHA mortgage lending guidelines such as the following:
Borrower not having met the mandatory waiting period after a housing event )foreclosure, deed in lieu of foreclosure, short sale)
Did not meet the mandatory waiting period after Chapter 7 bankruptcy
Other factors that the Automated Underwriting System picked up
For files that do not meet automated underwriting system guidelines, the files can be manually underwritten
Manual Underwriting Needs To Go Through Lender Who Does Manual Underwrites
Not all mortgage lenders can do manual underwriting mortgage applications. The Gustan Cho Team at Loan Cabin Inc. is a direct mortgage lender with no overlays on government and conventional loans that are experts in manual underwriting:
For those that do, there are more restrictions that apply than automated approved mortgage files
Manual underwriting is done for files that cannot get automated underwriting system automated approvals
Manual underwriters look for strong compensating factors such as rental verification, reserves, larger down payment, and lower debt to income ratios
Manual underwriting maximum debt to income caps can be as high as 50% DTI with compensating factors
For mortgage loan borrowers with no credit scores, a manual underwriting mortgage approval process can get them a mortgage approval by using non-traditional credit such as the following:
Rental verification
Electric bills
Water bills
Cable bills
Internet bills
Cellular bills
Insurance bills
Tuition
Other alternative sources
The way to prove that is by providing the mortgage underwriter 12 months worth of cancelled checks
VA And FHA Loans During And After Chapter 13 Bankruptcy
Gustan Cho Associates Mortgage Group is a direct lender with no lender overlays on government and conventional loans.
A large percentage of our borrowers are folks who are in a Chapter 13 Bankruptcy repayment plan and/or just got their Chapter 13 Bankruptcy discharged
Most mortgage lenders have overlays on VA Loans During And After Chapter 13 Bankruptcy and FHA Loans During And After Chapter 13 Bankruptcy
The Gustan Cho Team at Loan Cabin Inc. has no lender overlays on Chapter 13 Bankruptcy during and after Chapter 13 Bankruptcy discharge on both FHA and VA Loan Programs
Both FHA and VA Loans without two years of seasoning after Chapter 13 Bankruptcydischarged date need to be manually underwritten
This is because the Automated Underwriting System will not render an approve/eligible per AUS
Qualifying For Mortgage With Direct Lender With No Overlays
Borrowers who need to qualify for a mortgage with a direct lender with no lender overlays on government and conventional loans can contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at [email protected]. We are available 7 days a week, evenings, weekends, and holidays. A large percentage of our borrowers are files that need to be manually underwritten. All of our pre-approvals are TBD Subject Property Mortgage Underwriting so they are full credit approvals that are fully underwritten and signed off by our mortgage underwriters.
What Is The Difference Between Fannie Mae And Freddie Mac
This BLOG On What Is The Difference Between Fannie Mae And Freddie Mac Was UPDATED On May 20th, 2018d
The two mortgage giants that is responsible of purchasing conforming loans are the following:
Fannie Mae and Freddie Mac are called government sponsored enterprises (GSE) and are regulated by the Federal Finance Housing Agency (FHFA).
Majority of mortgage lenders are Fannie Mae mortgage lenders.
Chances are when borrowers apply for mortgage, lender, particular mortgage lender will submit file to Fannie Mae
More than 90% of all lenders use Fannie Mae when running conventional loans
Fannie Mae and Freddie Mac are the two giant government sponsored mortgage companies
Their role is to purchase mortgage loans are originated and funded by banks, credit unions, and mortgage companies in the United States
Fannie Mae has different mortgage guidelines than Freddie Mac
Freddie Mac has different lending guidelines than Fannie Mae
If a lender cannot get an automated approval from DU, DESKTOP UNDERWRITER, which is Fannie Mae, the lender can submit it to LP, LOAN PROSPECTOR, Freddie Mac’s AUS
May get an automated approval per Freddie Mac’s automated underwriting system, LP FINDINGS
Not all lenders do both Fannie Mae and Freddie Mac
Most lenders can only underwrite Fannie Mae loans and not Freddie Mac
I am able to do both, Fannie Mae and Freddie Mac mortgage loans
So if I cannot get an approve/eligible per DU FINDINGS, I can run it through LP and see if I can get an approve/eligible per LP FINDINGS
There is a difference between Fannie Mae and Freddie Mac lending guidelines
Difference Between Fannie Mae And Freddie Mac
Manual Underwrite Freddie Mac
There are times where I expect an approve/eligible per DU FINDINGS, FANNIE MAE APPROVE/ELIGIBLE PER AUTOMATED UNDERWRITING SYSTEM. But for whatever reason cannot get an approve/eligible per FANNIE MAE, If I get a referred/eligible per DU FINDINGS, prior to taking file through manual underwriting, I submit it to Freddie Mac’s Automated Underwriting System, LOAN PROSPECTOR ( LP ). Surprising I can sometimes get an approve/eligible per LP FINDINGS
Countless of times I have run into situations where I get a denial with Fannie Mae but get approved with Freddie Mac
There is a difference between Fannie Mae ad Freddie Mac automated underwriting system
Many times, Fannie Mae has difficulty with accepting borrowers getting a gift
Fannie Mae does not like gift funds
Especially from mortgage loan applicants with lower credit scores, higher debt to income ratios and limited credit trade lines on their credit report
Freddie Mac is not as picky with regards to gift funds like Fannie Mae
Many times when borrowers gets denied by Fannie Mae, they may get approved with Freddie Mac
Fannie Mae may turn down a mortgage application with errors on the credit reportt
But Freddie Mac may approve that file turned down by Fannie Mae
Pros And Cons On Fannie Mae And Freddie Mac
Freddie Mac is more lenient with mortgage loan applicants with poor credit history and lower credit scores.
Freddie Mac is also more lax on higher debt to income ratios
This is so especially those mortgage loan applicant’s with debt to income ratios as high as 50% DTI
Freddie Mac is also more aggressive and understanding on mortgage applicant’s who has limited credit trade lines and credit history
Fannie Mae likes to see a minimum of 3 aged credit trade lines
If the mortgage loan applicant has less than 3 credit trade lines and cannot get an approve/eligible per DU FINDINGS, I suggest the loan officer to submit to Freddie Mac
Credit Report And Automated Underwriting System
Fannie Mae does not recognize errors on a consumer’s credit report like Freddie Mac does.
Load more results. Apple Footer Apple Support. Owners manual magnavox. Apple Macintosh Instruction Manuals (User Guides) As per reader requests, direct links to official Apple Macintosh instruction manuals in PDF format - hosted by Apple's own support site - are provided below as well as on the specs page for each G3 and newer Mac. The Mac Process action can verify that one or more particular processes are or are not running on a client system. The Mac Process action provides these configuration elements and options: Continuously check the result and end the session if it changes.
For example, say a mortgage loan applicant filed bankruptcy
The bankruptcy was discharged 2 years ago
All of the creditors were part of his or her bankruptcy
But one of the credit trade lines that was included in the bankruptcy is still reporting as active
Fannie Mae may deny mortgage application with this error but Freddie Mac may approve it
Fannie Mae Homepath
FHA Lending Guidelines And Automated Approval
Manual Underwrite Freddie Mac Reviews
Fannie Mae and Freddie Mac lending guidelines differs than FHA loans. With FHA Home Loans, Underwriters need to follow the FHA TOTAL SCORE CARD, which are FHA lending guidelines. The main difference between Fannie Mae and Freddie Mac is how Fannie Mae automated underwriting system interprets a mortgage loan application versus how Freddie Mac’s Automated Underwriting System interprets it. When choosing a lender, make sure that the particular mortgage lender you choose is able to do both Fannie Mae and Freddie Mac mortgage loans.