Fannie Mae is targeting the release of Desktop Underwriter® (DU®) Version 10.0 for the weekend of June 25, 2016. The updates in DU Version 10.0 will help lenders underwrite with confidence while expanding access to credit and sustainable homeownership for creditworthy borrowers. DU Version 10.0 will include, but is not limited to:
Enhanced credit risk assessment using trended credit data.
Simplified and automated underwriting for borrowers with multiple financed properties.
DU Version 10.0 Enhancements
Enhanced Credit Risk Assessment Through the Use of Trended Credit Data
Trended credit data is an innovative tool that leverages an expanded consumer credit report to help predict customer behaviors through the correlation of historical patterns. It allows for better analysis of a borrower’s credit history by providing an expanded, more granular view of the borrower’s debt repayment behavior, and historical debt utilization and trends, to support well-informed, insightful decisions.
Credit reports currently used in mortgage lending indicate only the outstanding balance, utilization and availability, and if a borrower has been on time or delinquent on existing credit accounts such as credit cards, mortgages, or student loans. With trended credit data, lenders will have access to historical monthly data (when available) that shows the current limit, current balance, high balance, scheduled payment, and actual payment amount that a consumer has made on these accounts.
The use of trended credit data, provided by Equifax and Transunion, into DU’s credit risk assessment will support a more precise credit risk analysis. Among other benefits, this will allow lenders to determine if the borrower tends to pay off revolving credit lines such as credit cards each month, or if the borrower tends to carry a balance from month to month while making minimum or other payments.
Simplified and Automated Underwriting for Borrowers with Multiple Financed Properties
To simplify the underwriting process for lenders and improve operational efficiency, DU Version 10.0 will be updated to reflect a simplified multiple financed properties policy. The multiple financed properties policy applies when a borrower is financing a second home or investment property and is currently obligated on other financed properties. The updated policy will require fewer eligibility overlays and simplified reserve requirements, which will be automated with DU Version 10.0.
For DU to fully automate the updated guidelines, a Number of Financed Properties field will be added to the Desktop Originator® (DO®)/DU User Interface. This field will be used to capture the number of financed one- to four-unit residential properties (including the subject transaction) for which the borrower(s) are personally obligated. Refer to the DU Version 10.0 Integration Impact Memo for additional information on the new Number of Financed Properties field. When the Number of Financed Properties field is not provided, DU will determine the number of financed properties based on the information included in the Real Estate Owned section of the loan application, or the number of mortgages disclosed on the loan application or the credit report
- On February 2, 2016