Guaranteed Underwriting System (GUS) - Components and Overview

Guaranteed Underwriting System, better known as GUS, was designed to simplify and automate the entire process of credit risk evaluation for the Single Family Housing Guaranteed Loan Program (SFHGLP). Automated underwriting system is one of the most accurate methods of mortgage underwriting which is very efficient, objective, and consistent when compared to the old traditional manual methods.

GUS considers the mortgage loan application which is entered by the originator, property information, and credit repository data to calculate the potential borrower's to repay the proposed mortgage plan. GUS also examines certain elements in the mortgage loan application and gives underwriting recommendation and a credit evaluation within a quick turnaround time. In this article we will read about the components and the general overview of GUS to understand the functionality of GUS.

Guaranteed Underwriting System (GUS) Components

GUS is not deigned to evaluate the dependability of the borrower's income declared for repayment. This is the underwriter's responsibility to determine. Some of the key GUS components are mentioned here -

• Property and Income Eligibility

  GUS presents an interface with the Rural Development's website if the property offered is in the situated in the eligible rural area. It also ensures that the annual income of the household does not exceed the adjusted limits in accordance with the size of the household.

• GUS Rules Based Engine

  This Rules Engine integrates all the guidelines found in the RD Instruction, supplemented by the Administrative Notices regarding starting SFHGLP loans. The rules of this engine may be modified periodically depending on the issues which arise through analysis.

• TOTAL Scorecard

  GUS uses a slightly modified version of the FHA mortgage scorecard which is known as Technology Open to Approved Lenders (TOTAL) and it has been adjusted and validated for SFHGLP use. The TOTAL scorecard is the intellectual property of HUD. It allows the favorable consideration to applicants who show positive compensating factors.

• Credit Bureau Interface

  Fannie Mae Credit Interface Service is a platform which provides an interface between the guaranteed underwriting system and the credit bureaus. Lenders need not be subscribed to Fannie Mae to use this interface. This is a seamless interface to the lenders and only acts as a conduit.

Overview of Guaranteed Underwriting System

Guaranteed Underwriting System is a transaction based system. This was created to automate the entire process of credit risk evaluation. The general overview of the entire process is depicted in the form of a flow diagram here -

01

The Loan information is entered into the GUS (Either from AUS or direct entry)

02

Lender requests for an underwriting decision from GUS

03

GUS incorporates the borrower's credit report

04

GUS applies eligibility rules

05

GUS call the scorecard

06

GUS examines the results

07

GUS provides an underwriting decision

Final Underwriting Submission

Lenders need to examine all the points in the final GUS underwriting and findings report. Findings in the final submission may differ from the preliminary one which is obtained from the authorized user who submits the application file to the Rural Development in order to get a commitment of a loan note guarantee.

GUS is built with a unique quality control system which randomly selects some files for the purpose of final documentation submission. This helps in maintaining the loan quality when using GUS and keeps a check on data tolerances in GUS. The final underwriting report is printed by the lenders and retained as the permanent documentation in the particular case file and will be used when the agency conducts a compliance review.

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