When a loan application is marked as "referred," it means that the application has not been immediately approved or denied based on the initial assessment by the lender's automated system. Instead, the application is flagged for further review or consideration by a human underwriter or loan officer.
Here are some reasons why a loan application might be marked as "referred":
Complex Financial Situation: If the applicant's financial situation is complex or doesn't fit neatly into the lender's automated underwriting criteria, the application may be referred for manual review by a loan officer.
Borderline Credit Profile: If the applicant's credit profile falls within a gray area or is borderline in terms of meeting the lender's credit requirements, the application may be referred for further evaluation.
Insufficient Information: If the application is missing key information or documentation required for a decision, it may be referred for additional documentation or clarification.
Policy Exceptions: In some cases, the application may fall outside of the lender's standard underwriting guidelines, requiring a manual review to determine whether any policy exceptions can be made.
Verification Needed: If there are discrepancies or inconsistencies in the information provided on the application, the lender may need to verify certain details before making a decision.
High Loan Amount: Applications for large loan amounts may be referred for manual review to ensure the borrower's ability to repay the loan and to assess the risk associated with the higher loan amount.
Unusual Circumstances: If there are unusual or unique circumstances surrounding the application, such as a recent change in employment or a significant financial event, it may warrant further review by a human underwriter.
It's important to note that being referred doesn't necessarily mean the application will be denied. It simply means that the application requires additional scrutiny or review before a final decision can be made. During the manual review process, the underwriter or loan officer may request additional information from the applicant, conduct further analysis of the applicant's financial situation, or consider other factors before rendering a decision on the application.