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Credit Reporting Change

Jun 15
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Category | EMM Wholesale



Relaxed Requirements With Fannie DU Updates

Version 10.1 goes live this summer

May 30, 2017

By Mortgage Daily staff

This summer, the Federal National Mortgage Association is updating its automated underwriting system with more relaxed requirements for ratios, credit and adjustable rates.

Desktop Underwriter Version 10.1 will be implemented by Fannie Mae during the weekend of July 29, the secondary mortgage lender revealed in a notice Tuesday.

With the changes, the maximum debt-to-income ratio can go as high as 50 percent. DTI ratios between 45 percent and 50 percent will no longer need compensating factors.

"Based on an analysis of recent loan casefiles submitted to DU, the new risk assessment is expected to increase the percentage of approve/eligible recommendations lenders receive, specifically those with debt-to-income ratios between 45 percent and 50 percent," the notice stated.

Loans with DTI ratios in excess of 50 percent will receive an ineligible recommendation.

For loan applicants with disputed trade lines, the updated technology will first assess risk based on all trade lines reported as disputed. If an approve recommendation is issued by DU, then no further documentation of the disputed trade line will be needed.

On adjustable-rate mortgages, loan-to-value ratios will be aligned with those for fixed-rate mortgages up to a maximum of 95 percent.

Fannie said that the number of DU loan casefiles for self-employed applicants who are eligible for one year of personal and business tax return documentation would be expanded.

Casefiles eligible for property inspection waivers now include Desktop Originator loan casefiles underwritten using Preliminary Findings

Loan case files submitted during the weekend of July 29 or later are impacted by the changes.


Monday, May 29, 2017 - Memorial Day

In observance of the Memorial Day holiday, our company headquarters will close at 3:00PM local time on Friday, May 26th.  

All EMM offices will be closed on Monday, May 29, 2017.

Please note that the EMM lock desk will close at 2PM EST on Friday, May 26, 2017.

The lock desk will be closed on Monday, May 29, 2017 and EMM will not issue rate sheets.

Be sure to request any necessary extensions to accommodate the rescission period.

Normal business hours will resume on Tuesday, May 30, 2017.


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