U.S. Mortgage Index

Automated underwriting

Definition

Automated underwriting is an underwriting method that uses an automated system to assess the risk of a mortgage application. It is one way to underwrite, not the same as underwriting itself and not the same as manual underwriting.

In plain English

Some lenders send an application through a software engine that returns a risk assessment. That path is automated underwriting. Desktop Underwriter and Loan Product Advisor are familiar examples, not the definition. Different systems and lenders apply different rules.

Technical definition

Fannie Mae’s Selling Guide describes two official options for a comprehensive risk assessment: automated underwriting through Desktop Underwriter, or manual underwriting. That contrast is the PRIMARY technical identity.

Why it matters

A finding from an automated engine is not a substitute for the broader underwriting concept, and it is not a manual review.

Example

A lender may run an application through an automated engine, or a human underwriter may review the file without that engine. Those are different methods.

Commonly confused with

Sources reviewed

Important note

Automated underwriting systems do not all use the same rules.