DU VERSION 9.0

Posted by admin on October 20, 2012

The following changes will apply to new casefiles created in DU on or after the weekend of October 20, 2012. Casefiles created with version 8.3 will continue to be underwritten through version 8.3 guidelines and requirements.

 Updated Appraisal Documentation Recommendations

The following exterior-only property inspection appraisals and the DU property inspection reports will no longer be offered by DU with DU Version 9.0:

§    Exterior-Only Inspection Residential Appraisal Report (Form 2055)

§    Exterior-Only Inspection Individual Condominium Unit Appraisal Report (Form 1075)

§    Desktop Underwriter Property Inspection Report (Form 2075)

DU Version 9.0 will recommend one of the following (based on the type of property):

§    Uniform Residential Appraisal Report (Form 1004)

§    Individual Condominium Unit Appraisal Report (Form 1073)

§    Small Residential Income Property Appraisal Report (Form 1025)

Note:    In addition to the above full appraisal options, there will be loan casefiles that receive the property fieldwork waiver option. 

Updated Project Review Requirements 

A limited project review will no longer be permitted on principal residences in condominium projects when the LTV/CLTV/HCLTV is greater than 80%. DU will require a full project review on principal residences in condominium projects when the LTV/CLTV/HCLTV is greater than 80%.

Updated Income Documentation Requirements 

The following employment and income documentation requirements will be issued with DU Version 9.0:

 

Income Type

DU Documentation

DU Refi Plus Documentation

Base Pay (salary or hourly)

Paystub + W-2 covering most recent year

Paystub only

Bonus, Overtime, and

Commission < 25%

Paystub + W-2s covering most recent two-year period

Paystub only

Commission ≥ 25%

Paystub, W-2s, and personal tax returns covering most recent two-year period

Personal tax return covering most recent year

Self-Employment

Personal and business tax returns covering most recent two-year period

Personal tax return covering most recent year

Second Job, not self- employed

Paystub + W-2s covering most recent two-year period

Paystub + W-2s covering most recent two-year period

Second Job, self-employed

Personal and business tax returns covering most recent

two-year period

Personal and business tax returns covering most recent

two-year period

 

 

*ALIMONY AND CHILD SUPPORT: a minimum of 6 months documented receipt of income will be required for alimony and child support with DU version 9.0.

“Other” sources of income will be added to the on-line drop down application so a message specific to how each type of income will need to be documented (capital gains, foreign income, royalties, seasonal income, temporary and tip income)  

 

 

Verification of Funds for 30-Day Charge Accounts

Lenders will be required to document that the borrower has sufficient funds to cover the unpaid balance of all 30-day charge accounts. DU will be updated to include the balance of all 30-day charge accounts in the Total Funds to be Verified, as shown on the DU Underwriting Findings Report.

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Reserve Requirements for 2-4 Unit Principal Residence Transactions

A minimum of six months of reserves will be required for 2-4 unit principal residence transactions. This will be reflected in the Total Funds to be Verified, as shown on the DU Underwriting Findings report. This reserve requirement will not apply to DU Refi Plus transactions.

 

Manual Reserve Calculations for Specific Transactions

In certain cases, DU is unable to determine the reserve requirements for the transaction. With DU Version 9.0 loan casefiles, on those transactions where DU is unable to determine the reserve requirements, lenders must perform a manual calculation of the required minimum reserves for the transaction. To determine the total amount of assets to be verified for the transaction, lenders will be required to add the amount of Total Funds to be Verified (as specified on the DU Underwriting Findings report) to the minimum reserve requirements specified in the Fannie Mae Selling Guide for the following scenarios:

§    Principal residence transactions where the current principal residence is pending sale, converting to a second home, or converting to an investment property; and

§    second home and investment property transactions for borrowers who will have 1-10 financed properties.

 

Disputed Tradeline Message Update

The logic that issues the disputed tradeline message will be updated, and as a result, the message will be issued on a smaller number of loan casefiles in DU Version 9.0. As a reminder, if DU does not issue the disputed tradeline message, the lender is not required to further investigate the disputed tradeline on the credit report or obtain an updated credit report (with the tradeline no longer disputed). However, the lender is required to ensure that the payment for the tradeline, if any, is included in the total expense ratio if the account does belong to the borrower.

 

equal-housing-lender-logo-vector.pngData Mortgage dba Essex Mortgage is an equal housing lender. The corporate office is located at 2200 W. Orangewood, Suite 150 Orange, CA 92868 California Department of Real Estate License No. 00936013 . California Department of Corporations #603-G833 NMLS License 70377 Data Mortgage Inc. Member FDIC