You have to be willing to walk away if they say no, works best if the company cares about losing the deal - credit card signups might not be lucrative enough for a human to get involved and care.

Primary lenders ( the ones that actually lend their own money and at the end have the best rates -- arrived at adding the total expected cost of the APR plus add junk fees ) do not use non-automated underwriting for conforming loans. They win over the lenders that do not use automatic underwriting by tens of thousands of dollars.

Could someone explain what non-automated underwriting means? And what does confirming mean in this sense?

I get that they win compared to those who use more labor, but still some details would be nice :)

Automated underwriting is a computer program that takes your vital statistics as input (age, income, probably some illegal things like race and physical location of the house you're trying to buy [in RE lending, this is called "red-lining" and is illegal.]) and outputs a yes-or-no answer, sometimes with hints about what need to be changed to get a yes.

Manual underwriting is the same thing, only it's a person doing the same thing, and you can talk a person around.

Why might you need to do that? Well, I bought a rental building after I bought my primary residence, and I intended to move into the top unit in the building. Automated underwriting failed that because "primary home with more bedrooms and bathrooms" is "better" than "apartment in rental building" according to automated underwriting.

Since my lender also had manual underwriting, I was able to explain my situation to them, and why an apartment was preferable (I still don't understand why "I'll live there for a year to keep an eye on my investment" wasn't enough reason. They openly acknowledged that it was the superior way to do it, but it didn't move the needle on the formula)

Because one is a conforming loan and the other one is a non-conforming, which would mean that the issuer would have to hold the paper.

Strange. I've been assured hundreds of times on HN that computer algorithms are perfect and flawless, and that people are the problem.

Heck, Google built a billion-dollar business on making sure interfacing with wetware is a write-only process.

Using manual underwriting the poster above basically "lied" hence jeopardizing the portfolio. It worked for him but it was detrimental to the stability of the system.

> I get that they win compared to those who use more labor, but still some details would be nice :)

Mortgage portfolio performs best when its different portions match the exact specs of the models used to model the portfolio.

That basically means "plug in the numbers and receive an answer". That's automated underwriting. It is done pretty much exclusively for conforming loans: specific LTV, specific DTI of the borrowers, specific ranges of credit scores, specific amounts, specific points.

Manual underwriting is "In a view of a loan officer this mortgage should be ok".

People think that when they go to get a loan in a bank and sit down with a manager or a loan officer, they are getting manual underwriting. It is rarely the case -- most of the people on the other side just type in the answers into the software and it spits out the answer. That's what the likes of quickenloans and lending tree optimize and market.

Manual underwriting can be something like engineer #10 of WeWork shows up at a bank today and say "So, I want to buy that house for $5 million, and when We goes public I am going to be worth about 80mil, plus I still make my $250k a year". Most of the banks cannot handle this even though anyone with a brain should say 'Hmm... if he pledges all of the shares he currently owns plus all of his options and if he can get us in writing company's agreement that he can do that then we should totally loan him the money because his current holdings are worth $10m, he is borrowing $5m, and there are options that he should be able to exercise and he only has $80k in debt and his credit score is 675, so it seems he is ok. He is definitely a safer bet than that guy putting 25% down who will have only 10k in assets left after the first payment on a $2m loan we are giving. So if we are going to give a loan to the $2m guy, we should definitely give a loan to the WeWork engineer if he pledges his shares"

So there's an entire industry that exists which charges money for this "underwriting" when in reality it just sends the applications to a few banks that do it. But lots of people think that a mortgage broker can get them a better than deal a primary lender bank because of all the marketing. Those are the people that "won't pull Equifax because you asked"

Yeah, if I was a millionaire, I'd walk away.

I wanted the sign-up bonus. $800 of free money was too much to pass up in my financial situation.

This is the kind of situation where I think some regulation would help, e.g. federal law should allow me to decide which of the credit agencies they use.