System Override and Manual DowngradeĪ system override and/or manual downgrade of an Accept/Approve to a Refer classification may be required if a particular loan application variable is revealed during loan processing.Ī system override occurs when something appears on the loan application that triggers a requirement that an underwriter reviews the loan file.Ī manual downgrade becomes necessary if additional information, not considered in the AUS decision, affects the overall insurability or eligibility of a mortgage otherwise rated as an Accept or Approve.īoth systems overrides and manual downgrades may be triggered by inaccuracies in credit reporting, by eligibility issues, when a case file cannot be documented according to the automated underwriting system findings, and for other reasons including the unlikely failure of the automated underwriting system to recognize a derogatory credit item. If your loan officer is inexperienced, or if their lender is not aggressive with underwriting their interpretation of the guidelines, your chances of receiving an automated underwriting decision significantly go down. In some cases, it could be that your loan officer or underwriter did not structure your loan properly. There are many reasons why a VA manual underwriting downgrade can happen. If you are applying for a VA guaranteed loan, choose a loan officer that has experience with VA loans, and more specifically, VA manual underwriting guidelines. When choosing a lender, this is something that you want to research when you’re first applying for a VA loan.Ī lender that has the experience of manually underwriting a VA loan can give you a second chance if the automated underwriting system decision comes back with a refer/eligible finding, or if certain conditions are present at the time of underwriting. There are many lenders that simply do not manually underwrite VA loans.

VA manual underwriting guidelines are designed to give an Underwriter guidance and the guidelines for manually underwriting, and approving a loan application. If your lender is unable to get an automated underwriting approval, or if you’ve been turned down with no explanation, it’s possible that it’s your lender, and not you, who is not qualified.

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