Officially speaking, the entire Scorecard was accessed because of an automated Underwriting System (AUS) that will be perhaps not a keen AUS itself. But we are getting into the newest weeds right here.
The overriding point is that FHA pick funds must initial wade compliment of an automated underwriting system that utilizes the complete Scorecard algorithm, and lots of are going to be flagged to possess a hands-on opinion.
- If a debtor was better-certified without the warning flag, these include recognized owing to Overall without the need for individual/instructions underwriting.
- In some cases, the complete algorithm often choose problematic and you may downgrade the loan file. As a result a person underwriter need step up and yourself review the fresh new document.
Simply speaking, anytime a borrower drops away from fundamental qualification conditions getting a keen FHA financing, they’re going to have probably to endure a handbook underwriting comment.
Three Possible Results for Borrowers
The fresh new underwriting techniques can lead to around three you’ll effects. It may help to view it as a form of subscribers laws, that have green, yellow and you can red bulbs.
- Eco-friendly white: The borrowed funds underwriter discovers no problems towards document and activities a good clear to close, meaning the fresh borrower can also be proceed to closing. Continue reading
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