New DU Version Enhances use of Trended Credit

Fannie Mae has announced the implementation of a new version of its automated underwriting system.  The company said Version 10.0 of Desktop Underwriter (DU) "provides more simplicity and certainty to lenders through the use of trended credit data for enhanced credit risk assessment and new automated underwriting capabilities to serve borrowers with no traditional credit and for borrowers with multiple financed properties."  

The company introduced the concept of trended credit data with enhancements to DU in October 2015.  It said the new version of the software will promote "the first widespread use in the mortgage industry, and will benefit both consumers and lenders."

DU 10.0 will assist in using trended credit in risk assessment, allowing underwriters to take into account the monthly payment amounts that a consumer has made on revolving accounts, such as credit cards, over the past two years.  It also provides lenders with more insight into borrower behavior regarding their handling of revolving credit. On the other side it gives borrowers more control over credit evaluations and benefits those who pay off or pay more than the minimum required on their revolving accounts each month, increasing the likelihood of loan approval.

The new software will also be helpful to borrowers who lack "traditional" credit histories.  Lenders will be able to streamline their previous manual and often time consumer underwriting process of assessing the risk of such borrowers.  Using DU 10.0 will permit approval through verified use of credit from at least two nontraditional sources, one of which must be housing related.

For borrowers who already have multiple financed properties the enhancements will provide lenders with a simplified lending policy and underwriting process.  It helps ensure fewer eligibility overlays, automates remaining eligibility requirements, and determines required reserves for all financed properties.

"Desktop Underwriter transformed the industry when it was introduced over twenty years ago. Today's 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, Senior Vice President, 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."