Fannie Mae’s automated system that is underwriting Desktop Underwriter (DU), evaluates home loan delinquency danger and gets to an underwriting recommendation by depending on a thorough study of the main and contributory danger facets in home financing application. (See B3-2-03, Risk Factors Evaluated by DU) It analyzes the info within the loan casefile to achieve a overall credit danger evaluation to ascertain eligibility for distribution to Fannie Mae.
No body factor determines a borrower’s ability or willingness in order to make his / her mortgage repayments. DU identifies low-risk facets that can offset high-risk facets. Whenever a few high-risk facets are contained in a loan casefile without enough offsets, the chances of severe delinquency increases.
DU conducts its analysis uniformly, and without respect to race, gender, or other factors that are prohibited. DU utilizes validated, statistically significant variables which were been shown to be predictive of home loan delinquency across all groups.
DU will not assess a loan’s conformity with federal and state regulations including, without limitation, a loan’s possible status as a qualified home loan under applicable regulations. Loan providers bear single duty for complying with relevant legal guidelines, and these conformity responsibilities may possibly not be imposed upon or provided by Fannie Mae.
Underwriting with DU
Nevertheless, the very first distribution to DU for underwriting purposes must take place before closing of the home loan.
As soon as the home loan or debtor information modifications and it also not any longer fits the information and knowledge utilized if the loan casefile ended up being underwritten that is last DU, the lending company must upgrade the info and resubmit the mortgage casefile to DU. (more…)