DU in relation to a mortgage stands for Desktop Underwriter, which is a mortgage program used to analyze a borrower's application to see if it meets criteria set up by the governing agency of that type of a mortgage, be it a government program or a Fannie Mae/Freddie Mac one.
Significance
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The DU program allows lenders to quickly assess whether a borrower is qualified for the selected mortgage product. It is one of the first steps in the mortgage loan process.
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Function
The DU quickly alerts the lending agent to any potential problems with a borrower's application and helps the lender to determine which loans he should try to close and which ones he should immediately deny.
Types
DU can offer several results for a borrower's application, with the most favorable being an accept/accept and the least being ineligible/deny.
Considerations
The DU result is not the final say in a mortgage application. If the lending agent thinks that the borrower still has a chance to close, he may ask for a manual underwrite to get a human's opinion on the matter.
Benefits
DU is a good tool for mortgage lenders to use to decide which loans are worthy of a second look and further processing.