Manual Underwrite vs Automated Mortgage Approval

There seems to be a confusion between the ‘human underwriting’ piece of the Home Loan process and what a manual underwrite is.

Manually underwritten loans aren’t all that scary if your loan officer knows loans.

A manual underwrite is typically done on Govt loans.  Not very many lenders will do a manual underwrite on conventional. (Citi/Wells/Chase type big banks should be able to)

3 Scenarios can happen to your file when you apply for a mortgage 

1.  File approved thru automated underwriting(We call it a desk approval…. I approve it at my desk)….
A human underwriter still verifies all data and accepts DTI(debt to income ratio) as per automated findings allow(ex.  ratios above the published 31/43 ratios a manual underwrite allows). Bottom line: You still go thru ‘human’ underwriting to verify all input data we relied on for the approval.

2.  File approved thru automated underwriting…. but is downgraded to a manual underwrite per some guideline or deficiency in the file…. Files can be downgraded for different thing like disputed accounts on the credit report.  This triggers a ‘Manual Underwrite’. Manual underwriting by a human verifies all data and accepts DTI as per published guidelines(ex. 31/43).

3.  File does not receive an approve/accept(sometimes called a ‘refer’ to manual underwrite)…. File is referred to human underwriter to be manually underwritten to published guidelines…. Not expanded guidelines that automated sometimes allows.


all files(‘automated approved’ and ‘manual underwrites’) are seen by a human…. A human underwriter verifies all pieces of the file and verifies data relied on to get the ‘automated approval’

Most common downfalls to a manually underwritten file:

1. Strict DTI(debt to income ratio)  usually limited to published DTI of 31/43…. exceptions to higher limits on strong files with compensating factors

2. Rent payments must be verified on manual underwrites

3. Underwriter is  more likely to ask for collections to be paid(automated approval findings ‘issues guidance’ that says collections have been addressed by automated approval and do not need to be paid)


If your file is determined to be a manually underwritten file….. I strongly suggest that you work with a lender that will send your file through human underwriting ‘subject to’ you finding a home.
Credit is pulled. Rent verified. Tax transcripts are pulled. Employment verified. yadda yadda
Your file is approved with conditions(just like if you were under contract). One of those approval conditions is obviously that you have an acceptable property that appraises and passes inspection and has no title issues.


I hope this is helpful in explaining a manual underwrite or ‘manual underwriting’
The DallasLoanGuy

Tom Burris is The DallasLoanGuy, lending across the entire Great State of Texas since 2004


Tom Burris
Residential Mortgage Loan Officer
Premier Nationwide Lending
214-763-4629 cell/text/nights/weekends




additional comments on
"Manual Underwrite vs Automated Mortgage Approval"

  1. Gary Miljour says:

    Great Information Tom. Very few lenders like yourself on our company do manuals anymore. I have no idea why so many lenders are afraid of them. Then again we do not hire many MLO's without 5 years of expierence.

  2. Gary Miljour says:

    Great Information Tom. Very few lenders like yourself on our company do manuals anymore. I have no idea why so many lenders are afraid of them. Then again we do not hire many MLO’s without 5 years of experience.

  3. Robert Rauf says:

    Tom- people still dont understand that a person still makes the UW decision NOT the computer! as the saying goes- Garbage in = Garbage out. The DU findings are only as good as the info put in the file.. and it is pretty easy to screw that up if you dont use accurate information… The person upfront is even more important than the computer or the actually UW- we have to structure the deal from day one so it sails through the process.

  4. Ditto Robert, it's really a matter of GI=GO! Yet how often do we see that "approval" letter issued from faulty data that reverses a DU/AU (automated underwriter)?! Ultimately it's the seasoned loan officer that will best identify the landmines that may lurk in each deal and make sure they're addressed before sending a buyer house shopping. I wonder how they manage to do that with those automated "rocket" loans? 😉

  5. Great information Tom, esepcially for Firs TIme Home Buyers – and those who have NO credit scores!

  6. Jessica says:

    Would your morgage own officer approve you for a loan if they didnt think you would get approved by underwriting?

  7. Tom Burris says:

    Jessica, it is highly unlikely. They don’t get paid if it doesn’t close…. As most of us are on commission based compensation.

  8. Tamara Konovodoff says:

    I need a mortgage in Florida. I have a good deposit. Great job history and salary. Bad credit

  9. Tonya sweat says:

    Please call r text me at 17317275711.interested on how this works at getting a house.

  10. Lawrence Miller, MLO says:

    Here is some additional information this article should touch on: Manual underwrite reasons include downgraded due to foreclosure or deed in lieu in the past three years, or declining self employment income, or less than 2 years since bankruptcy, or non-disclosed real estate owned with no mortgage reporting on credit – all of these require manual underwriting. But the most common reason lately is because there are more than 2 non-sufficient funds on the borrowers bank statements.
    Manual underwritten files can contain a mix of all of the above and are much more difficult to review, pity the poor underwriter who gets stuck in the manual underwriting space if management is not understanding of the time and energy it takes to get these loans done. The norm for a typical underwriter day is usually 2.5 files per day and with Automated DU approval that is possible. Unforgiving companies will penalize underwriters for even reviewing files that do not fit the box- yet it is expected that these files get reviews just like any other. I’ve dealt with many an underwriter who will out-right refuse to review these loans and who say manual underwrites are outside their wheelhouse.
    Lastly folks, most companies do not like to decline customers but when it comes to time is money equation, manual underwriting is seen as just not worth it and that is why most lenders wont touch them.

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