By mid-2004, Countrywide Financial, a major subprime lender, had used MindBox's automated underwriting system to double the number of loans it made, to 150,000 monthly.

Whether or not a loan is conforming depends on the size and set of a guidelines which are implemented in an automated underwriting system.

The underwriting systems were approved "even though they were stress-tested using only a limited number and breadth of economic scenarios."

In 1995 Fannie and Freddie introduced automated underwriting systems, designed to speed-up the underwriting process.

Fannie and Freddie accomplished this be distributing their automated underwriting systems to the brokers.

She added that the agency's proprietary automated underwriting system, Desktop Underwriter, eliminates subjectivity in measuring borrowers' ability to make their mortgage payments.

Another virtue of automated underwriting systems is their flexibility.

Now, because of automated underwriting systems, there is no "one size fits all" formula for mortgages.

He added, "We have a very sophisticated underwriting system that keeps the default rate down."

Even five years ago, there were more than a half-dozen automated underwriting systems that banks commonly used in originating mortgages.