Desktop Underwriting: How It Works For You

Desktop underwriting is a general term used to describe an automated way of underwriting mortgage loan applications which uses artificial intelligence to enable lenders to make credit decisions based on a computer review of the loan application. As a powerful, sophisticated computer-based method, desktop underwriting, also commonly referred to as automated underwriting, was developed to review the critical factors that affect a loan underwriting decision.

Two of the most commonly used automated underwriting systems are run by Fannie Mae and Freddie Mac (federally chartered, stockholder-owned corporations that are the largest purchasers of mortgages in the United States). Desktop Underwriter® (DU) is Fannie Mae's automated underwriting software program, while Loan Prospector® (LP) is Freddie Mac's software program. The computer analyzes credit history, calculates debt-to-income and loan-to-value ratios, employment stability, assets and affordability to determine a borrower's profile and whether loans meet eligibility requirements.

Automated underwriting is a remarkable tool for providing our customers with fast, efficient service by allowing us to process loan applications in a quicker, more efficient and objective manner. With it, the following benefits can be realized by the borrower:

• We can automate and streamline the review and approval process thereby reducing the loan processing time by rendering an underwriting decision almost immediately.
• Meet the needs of more potential homebuyers with a comprehensive analysis of risk factors that can most often be offset by borrower strengths in other areas, thus allowing more borrowers to be approved for loans.
• Saves time and improves customer service for the borrower with typically less documentation requirements, streamlined appraisals, and faster closings.

For more information on our automated underwriting system and how it affects your mortgage loan, contact your DKMC loan professional today.