Jack M. Guttentag, a professor in the University of Pennsylvania's Wharton School, has proposed a new approach to underwriting, making use of modern computer technology. Under his proposed system, micro and macro projections and the lender's policy toward risk are specified. Each party responsible for the different aspects of underwriting can be held accountable. The following excerpts are taken, with permission, from an article in Volume 3, Issue 1 of Housing Policy Debate, a quarterly publication of the Federal National Mortgage Association.

This section sets out an ... approach toward automated underwriting that ... is ... easily implemented with current technology. But it requires lenders and investors to "bite the bullet" in terms of projecting the future.

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