Fannie Mae’s automated underwriting system, Desktop Underwriter (DU), evaluates mortgage 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 information and knowledge into the loan casefile to attain a general credit risk evaluation to ascertain eligibility for distribution to Fannie Mae.
Nobody factor determines a borrower’s ability or willingness to create their home loan repayments. DU identifies low-risk facets that will offset factors that are high-risk. Whenever a few factors that are high-risk contained in a loan casefile without adequate offsets, the possibilities 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 factors which were been shown to be predictive of mortgage delinquency across all teams.
DU will not assess a loan’s conformity with federal and state regulations including, without limitation, a loan’s status that is potential a qualified home loan under relevant legal guidelines. Loan providers bear single duty for complying with relevant regulations, and these compliance responsibilities may possibly not be imposed upon or provided by Fannie Mae.
Underwriting with DU
Nonetheless, the submission that is first DU for underwriting purposes must occur before closing of this home loan. Continue reading →