[belenos46]

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)

[notyourday]

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.

[reaperducer]

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.

[notyourday]

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.