The Future of Automated Underwriting

Renowned consulting firm CC Pace authored a white paper entitle 'The Future of Automated Underwriting,' which took a survey of the industry to arrive at research that supports where the industry is headed with AU systems. An overview of select results is shown below.

Key Findings

  • There is a general agreement that Automated Underwriting (AU) is more important than ever.

  • Companies should emphasize the AU platform as their key operating platform, instead of the LOS.

  • The AU platform provides the best way to balance efficiency with loan quality, and to establish consistency and control.

  • Using an AU platform, lenders have an opportunity to implement best practices for rules maintenance, to reduce maintenance cycle times, manual testing required and to improve quality.

  • Manual underwriting will not last and AU platforms will grow in importance in the future.

Key Definitions

Automated Underwriting System (AUS): A system that provides a full credit decision and loan specific conditions, based on the data provided and a trusted credit report, which carries the same weight as a human underwriter's decision. It is subject to income, property and other data verification. It answers the questions: "Is this loan approved? What do I have to do?"

Product, Pricing & Eligibility Engine (PPE): A query showing the products a loan is eligible for, and the current pricing (rate/point combos) for a selected product. "Assuming that this loan is approved, what product and price can I offer the customer?"

Decisioning System: A combination of PreQual, PPE and AU tools.

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CC Pace can be reached at (703) 631-6600 or visit their website www.ccpace.com.
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