Automatic Lender Law and Legal Definition

According to 38 CFR 36.4202 [Title 38 -- Pensions, Bonuses, and Veterans' Relief; Chapter I -- Department of Veterans Affairs; Part 36 -- Loan Guaranty; Subpart A -- Guaranty of Loans to Veterans to Purchase Manufactured Homes and Lots, Including Site Preparation], automatic lender is “a lender that may process a loan or assumption without submitting the credit package to the Department of Veterans Affairs for underwriting review. Pursuant to 38 U.S.C. 3702(d) there are two categories of lenders who may process loans automatically: (1) Entities such as banks, savings and loan associations, and mortgage and loan companies that are subject to examinations by an agency of the United States or any State and (2) lenders approved by the Department of Veterans Affairs pursuant to standards established by the Department of Veterans Affairs.”