What does "Approved Eligible" mean?? (loan officer, interest rate, approval)

[Theresejenkins]

I'm a RE Broker, a mortgage broker came back and said the lender said my clients loan application came back "Approved Eligible"...what the heck does that mean????

[renriq02]

It means that the borrower filled out the loan application
The loan application was submitted to an Automated Underwriting System, and the software came by with a 'certification' of Approve/Eligible.

Approve - According to the loan parameters the loan is approved
Eligible - The loan is eligible for the product that was submitted with the loan application.

Just because you received an Approve/Eligible doesn't mean the loan is good to go. The Underwriter may have other guidelines that need to be met, AND will need to verify EVERYTHING that the certification is asking to verify.

Originally Posted by Theresejenkins

I'm a RE Broker, a mortgage broker came back and said the lender said my clients loan application came back "Approved Eligible"...what the heck does that mean????

[rcarrillo]

Originally Posted by Theresejenkins

I'm a RE Broker, a mortgage broker came back and said the lender said my clients loan application came back "Approved Eligible"...what the heck does that mean????

It means they ran it through their automated underwriting system (AUS) and it said the loan was appove/eligible, which is the best result possible. Desktop Underwriter (DU or DO) is one AUS system used for conforming Fannie Mae files and FHA/VA loans that returns these results.

The approve part means it was approved (obviously) and the eligible means it meets the guidelines for the program. You can have a loan approve/ineligible which means the client is approved but there is something that is wrong with the guidelines (loan amoutn higher than conforming limits, down payment too low for the program requirements, etc). If it says "refer" it means an underwriter needs to manually review it.

There is another system, Loan Prospector (LP) is another system used for Freddie Mac conforming files and also for FHA/VA. Their results are a little different with terms like "accept".


Always remember that an AUS finding is only as good as the information put into it. An underwriter needs to review the results and match up the supporting documents to make sure that they meet the requirements. Some are easy to check off and others require some judgement and explanation. A good broker will know if the approval is solid or if there are red flags that need to be discussed with an underwriter.

Also, a good broker would teach you these things or not use industry terms to confuse you

[gmcrae]

what is, EA LEVEL 1

[mortgage king]

he doesn't know how to communicate. Based on the information he put in it is approved. EA LEVEL 1 Paying more then Approved Eligible TBW (http://forum.brokeroutpost.com/loans/forum/2/220511.htm - broken link)

[rcarrillo]

He isn't the only one with weak communication..... EA1 means that the loan received an "expanded approval" level 1. Under the desktop underwriter (DU) there are several different findings. Your loan can be "approved/eligible" which as described aboive is the best.

If there are problems with the file (lower credit, assets, income, higher debts, etc) then the loan might fall into an "expanded approval" category. They go from 1 (best) to 3 (worst). Each one usually means that the interest rate is higher and the underwriting is harder because of the increased risk.

If the loan is too risky, it will either get a "refer" meaning that an underwriter manually needs to review it or it will get an "ineligible" meaning that it does not meet guidelines.

If you are a loan officer, this isn't really the place to learn the business... there are other places for that. If you are a consumer, then you really need a loan officer that will speak with you in English instead of in Mortgage. Tossing out terms like that to consumers is just bad business and service.