New Tool Automates Non-Delegated Underwriting

LoanLogics has released its Non-Delegated Underwriting Module, the featured enhancement to its LoanHD Investor Module for Correspondent Loan Acquisition. The Non-Delegated Underwriting Module adds the ability for the investor to underwrite loans on behalf of the seller to the automated loan delivery process already present within the Investor Module.

Non-delegated underwriting is frequently used to offset risk in correspondent transactions. Sellers may be reluctant to underwrite higher risk loans themselves and investors may prefer to underwrite loans with which the seller has less familiarity.

“LoanLogics Non-Delegated Underwriting Module automates the underwriting workflow for the investor. More than that, we have brought the same data and document validation currently available in loan quality audits to the underwriting process. This brings increased productivity, improved efficiency and enhanced quality control to underwriting, even before the pre-purchase audit.” said Matt Thoman, Product Manager for Origination Technologies. “Our team has applied automation, improved accuracy, and transparency for better underwriting on loans which need it the most.”

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The Non-Delegated Underwriting Module makes underwriting non-delegated loans a dynamic, automated process that eliminates the need to manually validate data by “stare and compare” methods. Instead, the underwriter has full access to the LoanHD Loan Quality audit technology that compares data and documents in an automated fashion to streamline the validation process and significantly reduce errors.

During an underwriting audit the underwriter validates data that was used to generate pricing for the loan. Within the LoanHD Investor Module, if underwriting results in pricing data changes, the embedded Eligibility Card™ allows the underwriter to quickly view how the changes alter the pricing and eligibility. This reduces the “back and forth” between Secondary Marketing and the underwriter. “When the underwriting process produces a material change in the borrower’s loan file, the investor will be able to alter the price of the loan automatically and return it to the seller, so the system always remains accurate and up to date in real time,” said Thoman.

In addition, auditors reviewing a loan file prior to purchase have immediate access to the entire underwriting audit. For instance, investors can click a link and review W2s, tax returns, and related documents along with the details of the decision the underwriter previously made.

“Most investors run pre-purchase audits and are blind to their own underwriter’s decision made only a few days prior. That’s a time consuming, risky approach,” said Thoman. “This enhancement ensures our customers realize both efficiency gains and risk reduction with automation, transparency and accuracy.”