Fannie Mae has announced the implementation of enhancements to its Desktop Underwriter (DU) Version 10.0 aimed at providing more simplicity and certainty to lenders.
DU 10.0’s goal is to help lenders by using trended credit data—the first widespread use of trended credit data in the mortgage industry—to provide enhanced credit risk assessment, new underwriting capabilities to serve borrowers with no traditional credit, and to serve borrowers who own multiple financed properties.
“Desktop Underwriter transformed the industry when it was introduced over 20 years ago. (These) DU 10.0 enhancements highlight the continued investments and improvements we’re making in our technology to be better partners for our customers, and to provide access to mortgage credit for creditworthy borrowers,” said Marianne Sullivan, SVP, Single-Family Business Capabilities, Fannie Mae. “We continue to listen to our customers and make improvements to DU that take into account how our lenders tell us they want to work and to help them better serve today’s market.”
The enhancements to DU 10.0 include:
Using trended credit data for credit risk assessment: Considering monthly payment amounts a borrower has made on revolving accounts for the past two years; providing lenders with a more comprehensive risk assessment by offering more insight on a borrowers’ tendency to pay off revolving lines of credit each month; and giving borrowers more control over their credit evaluation and increasing the likelihood that DU will recommend borrowers for approval who regularly pay off (or pay more than the required amount) of revolving debt.
Automated underwriting for borrowers with no traditional credit: DU 10.0 helps lenders more efficiently serve borrowers who are without a traditional credit history by automating and streamlining an underwriting process that was previously manual and time-consuming. The new system requires at least two non-traditional credit sources to be verified, and at least one of these sources must be housing-related.
Automated underwriting for borrowers with multiple financed properties: The enhancements provide lenders with a simplified multiple financed properties policy, simply for the underwriting process for lenders, improve operational efficiency, and help ensure fewer eligibility overlays, automate remaining eligibility requirements, and determine required reserves for all financed properties.