Underwriting is the formal process where the lender verifies everything — your income, assets, credit, employment, the property's value, the title — to make sure the loan meets program guidelines and is reasonably likely to be repaid.
Modern underwriting is largely automated. Fannie Mae's Desktop Underwriter (DU) and Freddie Mac's Loan Product Advisor (LPA) take a thousand data points and spit out an approval, refer, or denial. Manual underwriting still exists for FHA, VA, and Non-QM products that fall outside the AUS box.
If the underwriter requests more documents (a "conditional approval"), respond fast. Delays on conditions are the #1 reason closings get pushed back. Have your W-2s, pay stubs, bank statements, and tax returns ready.