HousingWireHousingWire
Prudent AI — a California-based financial technology company — has released what it calls the first upfront automated underwriting system (AUS) designed specifically for non-qualified mortgages (non-QMs).
Unlike traditional AUS tools — which assess loan eligibility later in the mortgage process — Prudent AI’s system reviews key borrower data such as income, credit and assets at the point of submission.
The tool also applies investor-specific guidelines during initial evaluations, offering lenders and brokers an earlier look at a loan’s viability.
“The future of underwriting starts upfront,” said Steve Abreu, CEO of Newfi Lending, one of Prudent AI’s early partners. “At Newfi, we believe that giving brokers clarity at the point of submission is the key to unlocking scale in Non-QM. We’re excited to partner with Prudent AI to build the tech platform that makes this future possible.”
Non-QM loans serve borrowers who do not meet traditional lending requirements, such as self-employed individuals or those with nontraditional income streams.
Lenders in this market often face added complexity and regulatory scrutiny, and Prudent AI said its system is designed to address these operational challenges.
The software introduces a dual-phase review process, aiming to match loan conditions with investor criteria before the application enters the underwriting queue. Prudent AI said the goal is to reduce the number of exceptions, streamline documentation and increase overall processing speed.
“Non-QM lenders need more than speed — they need upstream accuracy, investor alignment, and scalable operations,” said Jayendran GS, CEO of Prudent AI. “This product isn’t just faster; it’s smarter, built to handle the growing sophistication of Non-QM markets.”
Angel Oak Mortgage Solutions, a wholesale and correspondent lender focused on non-QM loans, is also adopting the system.
“Angel Oak has been committed to growing the Non-QM market since 2013, and our collaboration with Prudent AI, along with the utilization of Prudent AI Upfront AUS solution, will be instrumental in helping us continue to lead that growth,” Angel Oak President Tom Hutchens said.
According to Prudent AI, the new tool is currently in use with a limited group of wholesale and correspondent lenders. Broader availability is expected by the end of 2025.
