AYF 2 | Automatic Underwriting Systems


Underwriters are there to protect the bank’s money, but they’re also there to make the bank money. Lenders usually talk to underwriters for help with the loan approval process. In this episode, host Merrill Chandler and guest co-host Brad Burnett talk about the underwriting process. As they dive into the difference between manual underwriting systems and automatic underwriting systems, they get into the underwriter’s role in the loan approval process and go down the list of all the documentation that an underwriter needs so that you’re more likely to be approved.

Watch the episode here:

Listen to the podcast here:

Automatic Underwriting Systems with Guest Co-Host Brad Burnett

I’d like to introduce my guest, my friend, my business partner, Brad Burnett. He is our Chief Marketing Officer and was responsible for the vast majority of making our Million Dollar Funding Formula into an easy and methodical way of delivering fundability to all of our students, and our clients. Welcome.

Thank you. I’m excited to be here again and I’m excited to talk about automatic underwriting systems and the mystery that they have been and the enlightenment that they are about to be. Let’s dive into it.

First of all, he talks about automatic underwriting systems. Automatic underwriting systems while it sounds technical and geeky, etc., it is, but we’re going to make it how it really applies to your pocketbook and the amount of money that you can borrow. Before there were automatic underwriting systems, there were manual underwriting systems. How many have you done a mortgage? That’s a manual underwriting system for the vast majority of lenders out there until lately. One of the things that we have come across is that when you are in manual underwriting mode, they want documentation because nobody trusts the data that aren’t from our credit bureaus, our credit reports and the things we put on an application. There are all kinds of messes going on out there.

They want to know that when you say you make $60,000 a year, they want to see the documentation that you have $60,000 a year. This requires us to have financials, tax returns and all the things that are in the way, especially real estate investors those prohibitive businesses. The businesses that are a little suspect, let’s call them high-risk. Our business is a high-risk business because of the notorious nature of other credit repair companies even though we don’t do credit repair, we get looped in with that. Let’s talk a little bit about the history of manual underwriting and some of the things we learned at FICO and introduce it. How do we get back to automatic underwriting and the benefits for all of our funding hackers out there?

That brings up the point of the big challenge that I’ve seen in the decade that I’ve worked with you is that people don’t know what they’re up against. How deep are we going to go into this? Are we talking about the approval scoring or are we talking about how underwriters, the thing that I always liken to trolls that live under a bridge? If you’re an underwriter and that’s not you, congratulations, but we never meet him. We never talk to them. They’re also there to make the bank money. How could an underwriter make a bank money? What if I got approved at the lowest level not the highest level possible? Would that make the bank more money? I don’t want to make it seem like it’s the conspiracy theory here.

Profit motive and conspiracy theory, sometimes there’s a little fuzziness between there. There’s the intention behind it.

There’s a lot of crazy things that’s happened in throughout history for money.

Absolutely, this is not alone.

It is the thing that many people, the problem is they don’t know why they’re getting denied and you go full doc, that means you have a little troll looking at your paper. They’re trying to figure out how they protect the bank’s money.

First of all, how many of you have met an underwriter in the wild? Let’s not talk yet about that they’re becoming a dying breed as a function of lending. How many of us have met underwriter in the wild because he calls him a troll? I throw them in with the mythical creatures. I hang out with the griffins and the unicorns because they are in the backroom, even in a mortgage office. They’re like, “Let me go talk to the underwriter.” Behind the door and they disappeared. All of a sudden, new instructions come out from the voice of this mythical creature. Underwriters as human beings, you’re awesome. We love you. We’re all in. As a function of the loan approval process, it’s a little hinky there.

Funding Secret #1: If you know the rules, you can ethically hack bank underwriting systems for up to $1,000,000 in cheap and easy bank money #GetFundable Share on X

One of the things that we need to create is you are fundable only if a lender gives you money. You can call yourself anything that you want, but until a lender gives you money, you don’t get to wear the title. Are you F*able? Our experiences that in the manual underwriting field, there’s a massive change occurring but manual underwriting means full doc income verification. You’ve got to prove your tax returns, what your current mortgages are right now when you go to a local mortgage broker. They want to document everything because and one of the things I live by, he who has the most documentation wins. If you have all the documentation that an underwriter needs, you’re going to more likely be approved.

I want to bring some of that because I know it’s not for this episode. This isn’t the right time. If you have a truly fundable profile, they might even ask you for full docs and we’ll tell you how you can avoid that or oftentimes get around it. We’re going to talk about that. It’s in another episode. I know that for a fact, but one of our clients, that was their experience where they magically passed that full doc process. Why? We’ll talk about that another time. Don’t think that we’re always stuck. That’s one of the big misnomers.

It doesn’t have to be this way and there are literally whatever funding hold you find yourself in, there is a ladder, easy steps to climb out of that because the whole topic is if you know the rules of the game, you can hack the game to win but you got to know the rules and that’s what we’re talking about. What rules are there? We don’t know the rules because we know, “Give us certain documentation,” and then they do that little cauldron mythical thing in the backroom and we are denied or approved or I need more information. You’ve never been asked for more information during a mortgage. That manual underwriting is all the documentation more and more until they are satisfied.

Then something has been happening over the last few years but more significantly in the last two to three years. The huge movement towards what is called automatic underwriting systems, AUS. Remember that’s what that means but Automatic Underwriting Systems. These automatic underwriting systems automate the entire process and that’s AI. As Brad has said in the past, we’re used to filling out an application and doing this old Neanderthal information piece of paper and then we submit it to those guys. The automatic guy system applies millions of lines of code and algorithms in order to determine whether or not you’re A, full of crap in your application and fraudulent or B, whether or not they’re going to prove you and most importantly, how high those approvals are if they’re going to prove you. We are about in this episode talking about those rules, automatic underwriting systems.

Until this podcast, it’s been a mystery. What they’re looking for? What are we going to be able to provide? How can we get the approval in the most effective and the fastest way possible? Merrill mentioned it a couple of years ago, all of a sudden this takes off Rocket Mortgage. They’re the leader of automatic underwriting systems in the mortgage industry. Credit cards have been doing it for a while, but the big loans, the instant or automatic approvals on business lines of credit, that’s all new and in its infancy.

AYF 2 | Automatic Underwriting Systems

Automatic Underwriting Systems: Even if you have a truly fundable profile, underwriter still might ask you for full docs.


It’s barely getting its legs under it. Let me tell you about an example to make this transition from manual to automatic. I’m sitting at second FICO. We have a FICO liaison that we get to ask any question we want and they hook us up with meetings with the people at FICO. We’re sitting here in one of these classes and I see one of these FinTechs like SoFi or Oscar, Kabbage there. There’s this whole industry and then there’s this sweet woman, vice president of SunTrust Bank. It was not quite a debate, but SunTrust had adopted. They were moving into the FICO realm to convert everything over to automatic underwriting because they’d been manual every step of the way.

They were basically interviewing her as to why and the interesting thing was is that she said, “At SunTrust, we had to be profitable for manual underwriting to take care of the person and all the people who had to weigh into whether or not we approved the loan. It had to be a minimum of $38,000 loan at 6.5% interest for three years. Those were the terms for them to break even. That means they could not profitably do it $20,000 or $30,000 loan. They couldn’t give a better interest rate, even though at the time we met the prime was 2%. It could have been a 4% loan, but they couldn’t offer that loan. They were getting priced out of the market because they couldn’t keep up with these FinTechs. The financial technology companies by the names that we’ve mentioned had no chance of competing against those because they were still doing it manually.

That’s the transition between why everybody even the old school banks are moving to automatic underwriting systems so that they can use artificial intelligence to establish your fundability literally in 30 seconds. To make sure that we know what we’re talking about, how many of you have received an approval for a credit card in 30 seconds, two minutes maximum but while you’re on the phone, while you’re online talking to your banker? Many people when we do this in our public conferences and stuff like that, more than half of the room raised their hand saying, “I got an approval in 30 seconds.” That’s automatic underwriting. More importantly, how many of you have received an email or a letter from that credit card issuer where they said, “We’ve raised your limit. Congratulations. We gave you another $500, $1000, $5,000 to your credit limit?” Manual underwriting would require income verification, would require that you have tax returns, that would get your financials if it was for your business.

Think about it. How many of you have received that letter saying, “Free money, no income verification, no tax returns and no credit inquiry?” How are they doing this? You don’t get to say, “Because I pay my bills on time,” because you’re soon going to know in a deep dive later FICO measures 40 characteristics of your profile. Paying on time is one of them. You don’t know Jack about what they’re looking at to approve you for this free money, no inquiry even. They don’t need to look at your credit report. They measure your internal data with your relationship with that bank. If you know the rules of this game, you can navigate your way to approvals because what if you knew those answers? What if you knew what it took to get approved without income verification, tax returns or even a credit inquiry?

To add to that, the cool thing is that this as a process, as a system has been refined for years and years on the personal side of funding and it’s now being applied on the business side of funding. That’s one of the coolest things that I ever experienced when we’re working with our clients is when they call us and tell us, “My business line of credit got an automatic limit increase.” That wasn’t possible a few years ago.

Underwriter are there to protect the bank's money, but they're also there to make the bank money #GetFundable Share on X

In fact, we learned about that at FICO. The first one when we spoke with the SBSS which is Small Business Scoring Service. It’s FICOs business credit scoring. We learned that SBSS was being developed. FICO is buying all the data from Dun & Bradstreet and scoring it and perfecting their model. There’s this perfect opportunity where they have not dominated the market yet, but PAYDEX isn’t the thing. We who are funding hackers, we who know what to do and how to navigate these waters, we can continue to pick up more funding, especially for our business, without all the paperwork and all the things that prohibit you from being approved. We won’t need those because they don’t need them. The underwriter software won’t need that information because your data, your performance, all the behaviors that they’re reporting on, they already know the answers that a yes or a no by looking at your data and what if you had total control over your data so that you could get a yes every freaking time.

I think it’s important to know that this is a podcast not just about being fundable but about being fundable in business because if you’re fundable in business, you’re fundable. It’s about having the right pieces of fundability of your profile in place so that we can hit that 80% of business lending that’s incorporated in your personal profile.

Don’t miss what he said. If you are fundable as a business, you are fundable as an individual for your cars, homes and all your personal credit needs. The thing is that you don’t know when the entrepreneurial spirit is going to hit you, if it hasn’t already. You don’t know what venue, real estate investing, note buying, Amazon business, you have no clue if you’re not doing it yet. You have no clue what your future looks like. What if you were to start preparing yourself to be able to execute on any possibility in your future?

What if you do have a clue and you didn’t know that you probably should begin preparing yourself. Some of the saddest times at our company or when we meet somebody who feels like they built their business but couldn’t grow it. All of a sudden, they’ve reached this cap where they’re like, “I can’t go any further. I can’t do any more” because they didn’t know.

They couldn’t get other people’s money so they could invest it in these growth opportunities. They had no clue. They come to us. People come to our boot camps. All the time they’re like, “Why didn’t I know this ten years ago? I’ve wasted all this time spinning my wheels because I didn’t know and no one was here to tell me.” We’re here to tell you and this is what we’re here for.

AYF 2 | Automatic Underwriting Systems

Automatic Underwriting Systems: Understanding what automatic underwriting systems are looking for gets you in a position where you can get a fast approval.


We have clients who use hard money. We’ve used hard money in our investments. I’ve had good experiences and I’ve had bad experiences with hard money investments.

That’s weird that we’re like everybody else and learned the hard way.

If I can have access to money that is a third of the cost in many instances. If I can have 5% to 7% instead of 10% to 17%, depending on how well you know and no points, why wouldn’t I? It’s that we don’t know what we don’t know. That’ll be a theme in many of our conversations.

Write a check to do a deal. If you’re not writing a check to do a deal, you don’t know yet. Everything is possible.

What we teach doesn’t make hard money lenders obsolete. It could replace them. It did for Theresa. She was able to get into a $1 million asset that she wouldn’t have without our help. I’m sure you have heard Theresa story. If not, jump over to GetFundable.com and check it out.

Remember, Share on X

You’ll see it. It’s breathtaking. It’s such a beautiful soul and she nailed it. That was that example when you said, “Your credit is fine.”

She says it best in her own words because I can’t think of the exact quote either. With understanding what automatic underwriting systems are looking for, it gets you in a position where you can get fast approval. You get approved for more

They trust FICO has built the underwriting systems. Remember, we met the lender liaison that works at FICO who is in charge of sinking up their internal underwriting with the FICO underwriting. Because they trust that data, they automatically give higher approvals through automatic underwriting than they ever did with manual underwriting.

100% and that’s the key to being able to navigate the funding process. That’s the first step.

The first step is to know the rules of the game and we’re going to continue to go through all of these rules over the episodes, but Brad is his saying it spot on. We cannot hack underwriting guidelines unless we know what they’re measuring, knowing those measurements and knowing that their machine code, their artificial intelligence that’s being written in. If you go to FICOWorld.com, you’re going to see on the masthead is, “Artificial Intelligence Protects Your Money,” or the equivalent but that’s what it’s all designed to do. When do lenders make money? When they lend, but only if it’s a sure thing, if it’s a safe bet for them. We’ve got some great things on how they make money with these underwriting systems.

You need to understand that if you’re interested in this, if you’re following us now, because this is your jam, we’re going to walk you down that path of what the rules are, how to navigate those underwriting criteria and get the approvals that you’re looking for because we only win when you win. That’s we’re all about. I think that wraps up our episode about how to create the best. If you know the rules of the game, you can win that game, but you can’t win it unless you know the rules. We will see you next time. Go to GetFundable.com to see exactly what we’re about.

Go to GetFundablePodcast.com to see our podcast. Go to our Facebook, check us out. At this point, it’s under Get Fundable! so check it out.

We are transitioning because at CreditSense, we’re not about credit anymore. We used to be and now we’re about funding and fundability optimization. We thought it was time to represent it in the world, what we do for you and for ourselves

Remember to like this, share it or download it. Subscribe if you haven’t subscribed yet because we are going to continue to dive into the depth and we’re going to help you become fundable so you can have the money to do what you want to do with whatever it is that’s important to you.

Important Links:

Love the show? Subscribe, rate, review, and share!
Join the Get Fundable! Community today: