Discretionary Cases
Some applicants have such negative events in their credit histories, they'll only qualify with an intense manual underwriting process. The most serious discretionary case -- and the most difficult to overcome -- is a bankruptcy. Other cases needing human judgement, rather than computer scoring, are previous foreclosures and overseas work where the borrower has no U.S. payment history, for example. These are cases where, with manual underwriting, a lender can look at compensating factors. The borrower may have a high-balance savings account, for example, or a family member guaranteeing the loan -- two circumstances that make a banker more comfortable.