What is the effect automated underwriting software has on the mortgage application process?


Automated underwriting software has become the standard for successful and expanding mortgage business, according to statistics provided by large loan providers. They report that employing automated underwriting software has reduced the time from application to approval from a week in the past to less than a minute nowadays. As a result, the mortgage industry flourished in the last several years (until the 2007 mortgage crisis hit). Brokers, lenders and underwriters have been able to double and triple the number of processed loans, thus accumulating mortgage turnover for hundreds of billions of dollars all made possible by the wider integration of automated loan underwriting software.

Automated Underwriting Influence Examples

The largely implemented automated underwriting process has led to expanding specific mortgage niches into real market segments - for example, refinancing and sub-prime lending, which would not have been possible had not the automation of loan underwriting taken place.

Benefits for the borrower include more flexible assessment and possibility to better match the right loan with the right borrower. Also, the complexity and combinations of loan products has so increased that it has become complicated for brokers and lenders to manually find the best mortgage for potential homeowners. Unless automated underwriting takes care of running a comparison among different loan alternatives, there is no way to make sure the client has been matched with the most appropriate product currently on the market.

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