Desktop Underwriter (DU) 5.7

Effective with new submissions to DU on or after July 22, 2007

Just received some very interesting information today... 

We knew this was coming.....

Fannie Mae will be releasing the latest version of DU.  Some of the changes are:

Interest Only Qualifying

• Interest Only loans must qualify as follows:
  • Fixed Rate:  Qualify with the fully amortized payment at the Note Rate
  • ARM:  Qualify with the fully amortized payment at Index + Margin

(previously, qualified with Interest Only payment at the Note Rate)

• For loans submitted under a previous version of DU and which may need to be resubmitted:
  • If underwritten with DU 5.6, must use existing case number or the file will be underwritten under DU 5.7 guidelines.
  • If underwritten with DU 5.5 and only if it is determined that a resubmission will be necessary; you must re-run DU, but are cautioned with the following:

• If rerun prior to July 22 the file will be underwritten under DU 5.6 guidelines due to retirement of DU 5.5.  For marginal loans, this could result EA or Ineligible findings.
• If rerun on or after July 22, you will get an "out of date" and will be unable to submit to DU.  A new case file must be created, submitted to DU and underwritten under DU 5.7 guidelines.  The findings will then be subject to interest only qualifying change per DU 5.7, and for marginal loans, this could result in EA or Ineligible findings.
• If underwritten prior to July 22 with no subject property address (TBD), the original case file number will be kept. When the loan is resubmitted with a subject property address after July 22, it is imperative that the original case file number is used for the loan to be underwritten under 5.6 guidelines.