Underwriting is the next step after application entry in the loan origination cycle. At the beginning of the underwriting process, an application number is generated for the submitted application. The application then passes through the initial prescreening checks and receives a credit bureau report. Then the system assigns it a custom credit score and based on this, the application automatically updates its status and is sent to the appropriate queue. In doing so, one of three things happen to the application:

• The application passes all the prescreening requirements and is automatically approved based on the auto-decisioning process. 
• The application fails the prescreening requirements and is automatically rejected based on the auto-decisioning process. Again, the system notifies the borrower of the decision notice. 
• The application receives a status requiring a manual review. It is now up to the underwriter to verify data and manually change the status of the application.

In this stage, the FI assesses the eligibility of the borrower for the requested loan offer, by analyzing the borrower’s financial ratios and credit scores. The FI also obtains credit details from external agencies and field investigation agencies. After ascertaining the eligibility of the borrower, the FI provides offers to the borrower and generates payment schedule and schedule details. 

Q2 Origination divides underwriting into three parts:

• • Credit Decisioning
  • Pricing
  • Approval

For the underwriting process, a lending organization can opt for integrations with various third parties to determine the creditworthiness of the borrower or applicant. As part of credit decisioning, risk assessments may be performed. For these, lenders can leverage existing scorecard functionality to define and evaluate specific risk criteria associated with the Account record. Lenders also define the execution criteria that should be used to determine when the risk assessment scorecard should be used. Q2 Origination provides a risk assessment button on the Salesforce Account screen that, when selected, initiates the risk assessment and subsequently updates a total risk score field on the Account record.

The tasks to be performed in this stage are explained in the following chapters.