Mortgage Info for Homes and Small Business Financing

Desktop Underwriter DU 10.0 and Trended Credit Data

DU 10.0 and trended credit data are back!

Fannie Mae recently announced that Desktop Underwriter (DU) Version 10.0 with the incorporation of Trended Credit Data will now be released during the weekend of September 24th.DU 10.0 and trended credit data

This new announcement comes after their initial push back from an anticipated release during the weekend of June 25th.

We alerted you to this new DU development on June 17, 2016.

The significance of Trended Credit Data was explained in our article on June 29th.

In their Release Notes, Fannie Mae states the following:

To support our lending partners, Fannie Mae continues to make ongoing investments in our risk management tools, enabling greater confidence and efficiency in the origination process.  These tools help to provide the highest probability of loan performance over time, resulting in reduced costs to service those loans.  We regularly review the DU risk assessment to provide certainty and clarity that the loan meets Fannie Mae’s requirements.

DU 10.0 and Trended Credit Data

Besides the inclusion of the new Trended Credit Data, the biggest change found in DU Version 10.0 is the ability to underwrite a loan for borrowers who have no credit score. None!  This process will automate a process which was formally a manual underwrite and therefor eliminate the ability the ability of underwriters to make smart, business like underwriting decisions.  If you detect a bit of snark there, you are correct!

There will be limitations imposed by Fannie Mae for those borrowers who demand this feature due to their lack of credit scoring.

The main risk features that will be evaluated are:

  • Borrower’s equity and LTV ratio
  • Liquid reserves
  • Debt-to-income ratio

The lender may choose to manually underwrite the loan if it does not get an Approve Eligible finding and document the file as required by the Fannie Mae selling guide.  That’s significant!  We’ll see how many lenders are willing to do that!

Our Translation of Fannie Mae’s Release Notes

“ongoing investments in our risk management tools”

We have to give our technical staff something to do.

“provide the highest probability of loan performance over time”:

We are tired of the losses and dealing with our seller servicers on foreclosures and short sales.

“resulting in reduced costs to service those loans.”

Our seller servicers have been griping about the servicing retained fees they get.

“provide certainty and clarity”

Our way or the highway and buybacks suck for everyone.

And of course, changes such as these always result in higher costs to the consumer.  Both Equifax and TransUnion reports will increase by $1.50 per file.  Secondary use, that is when your credit report is uploaded and incorporated into the automated underwriting engines will increase by $0.55 per file.  Experian has no price increase as they are not offering trended credit data at this time.

Leave us a comment below with any questions or concerns you have.  We’d like to know what you’re thinking.



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