Fannie Mae Updating Desktop Underwriter (DU)

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut NMLS #65149

 

During week of April 23rd Fannie Mae will be making an update to Desktop Underwriter (DU).  The update is to implement a new feature meant to address property values for refinance loans.  Fannie Mae feels that the new changes will create more transparency to the way that Fannie Mae's Desktop Underwriting System estimates the value of a property in order to determine if it will be eligible for a appraisal waiver offer.

If Fannie Mae feels that their system has enough information about a property to estimate the value, DU will issue the following message:

"Based on the standardized address, Desktop Underwriter estimates the value of the property at $<estimated value>. This estimated value was developed by internal proprietary models to help determine eligibility for a DU Refi Plus property fieldwork waiver. It is not the result of an appraisal, nor was it developed by a state licensed or certified appraiser. This estimate is intended to be used solely by the lender to underwrite the refinance of the borrower's mortgage loan."

If Fannie Mae feels that their system does not have enough information about a property to estimate the value, DU will issue this message:

"Based on the address and other information available to Desktop Underwriter, this property is not eligible for a DU Refi Plus property fieldwork waiver."

It will be interesting to see how this update will impact the approval process on refinance loans.  I am holding off my opinion on this, but I am always concerned about any system that trys to provide automated property value estimates.

 

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 Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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  1. Gabe Sanders 04/23/2012 03:45 AM
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Show All Comments
Rainmaker
1,891,221
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the information. It would be nice if the program was also good for  home purchases not just for refinancing.

Apr 20, 2012 04:12 AM #1
Ambassador
1,659,056
Richard Weisser
Better Homes and Gardens Real Estate Metro Brokers - Newnan, GA
Richard Weisser Coweta Newnan Homes for Sale

George...

What about condition? Sounds like a recipe for controversy to me. But like you, I will take a "wait and see" attitude.

Apr 20, 2012 05:05 AM #2
Rainmaker
533,785
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Anything automated makes you tend to think that certain unique qualitatitive characterstics of a property could fall in between the cracks of their system, but like other's mentioned a wait and see approach is important to see how it unfolds.

Apr 20, 2012 05:37 AM #3
Rainmaker
919,410
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

I wish it was as siple as Fannie is suggesting it will be. There are so many variations that come into play. We'll deal with it, just like everything else that will come along.

Thank you for sharing the post with all of us.

Apr 20, 2012 05:38 AM #4
Rainmaker
892,863
Michael Setunsky
Michael's Commercial LLC - Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

George, I hope its not Fannie Mae's approach to Zestimates. Too many variables involved to automate this. Let's see what happens.

Apr 20, 2012 05:43 AM #5
Rainmaker
325,419
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

I wonder if the lenders will abide. They could conceivably add their own overlays to that

 

Apr 20, 2012 06:30 AM #6
Rainer
224,489
Shay Campbell
Universal American Mortgage Company - Raleigh, NC
Raleigh, NC

This update is not for all refinances, it's only for loans that is eligible for the "DU Refi Plus" program.  "DU Refi Plus" is the name Fannie Mae uses for their HARP program loans.  Thanks for the blog.  This is good information.

Apr 20, 2012 06:38 AM #7
Rainer
157,536
Anthony Daniels
Coldwell Banker - San Francisco, CA
SF Bay Area REO Specialist

Anything FNM "updates", usually means it is still at least 1 year behind the curve.

Good post, either way.

Apr 20, 2012 08:21 AM #8
Rainmaker
607,217
Barbara Altieri
RealtyQuest, Fairfield and New Haven County CT Homes for Sale and Real Estate - Shelton, CT
REALTOR - Fairfield County CT Real Estate

George -- Sounds like FNMA is headed down Zillow lane. What exactly does 'enough information' mean?  I agree with your concern about how this will play out.

Apr 20, 2012 02:08 PM #9
Ambassador
1,238,717
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

YEs sounds like Zillow to me. Doesn't sound so accurate here.

Apr 20, 2012 04:09 PM #10
Rainmaker
1,007,603
Nick T Pappas
Assoc. Broker/Broker ABR, SFR, e-Pro, @Homes Realty Group, Huntsville AL - Huntsville, AL
Madison & Huntsville Alabama Real Estate Resource

George, maybe I'll hold off on my opinion as well...when an agency wants to create more "transparency" I tend to worry...I don't think it went so well for the purchaser when the new GFE's came out and the same goes for the new appraisal Data Set...who in the world can make any sense out of that?

Apr 20, 2012 04:33 PM #11
Rainmaker
1,611,066
Debbie Gartner
Floor Coverings International Westchester NY & Stamford CT - White Plains, NY
The Flooring Girl - Westchester hardwood flooring

George - Yes, it will be interesting to see how it plays out.  I share your concern with processes that are so automated like that.  Hopefully there is a way to easily resolve things when there are discrepancies.

Apr 21, 2012 03:29 AM #12
Rainmaker
399,788
June Tassillo
Owner/Broker RE/MAX Elite Realty - Franklin, NC
Let me help you with the next phase of your life!

George ~ So it will all depend on what a person puts into the system as to what you will get out.  If it needs more information will they tell that person what it needs?  How can they Zestimate every Local Market?  

Apr 22, 2012 04:40 AM #13
Rainmaker
325,419
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

It ain't Zillow people......

AVM has been used for years. And has been deemed reliable by the lending industry. Zillow has not been deemed reliable.

 

Apr 23, 2012 06:18 AM #14
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George Souto

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