If an automated underwriting system does not assign a loan application a risk classification, what can the lender do?

When an automated underwriting system does not assign a risk classification to a loan application, one of the common steps a lender can take is to manually underwrite the application for potential approval. This approach allows the lender to assess the borrower's financial profile through traditional underwriting methods, which often include evaluating credit history, income, debts, and other relevant factors.

This manual process provides flexibility and helps ensure that applicants who may have unique circumstances or complexities in their financial situation are still given a fair opportunity for loan approval, even when the automated system is unable to classify the risk. Manual underwriting can be essential in making informed decisions, especially for borrowers whose profiles may not fit neatly into the automated criteria used.

The other approaches highlighted do not align with standard practices in mortgage underwriting when faced with an unclassified application. Automatically rejecting the application might overlook potential borrowers who could meet the necessary criteria through a detailed assessment. Submitting for review by a different lender could complicate matters and not address the immediate need for evaluation. Requesting additional documentation could also be an approach, but the more effective solution in this context is to proceed with a manual underwriting process to comprehensively evaluate the application.