Ensuring DU Data and Delivery Information Accuracy
The data submitted to DU must reflect the loan as it was closed, including occupancy type, product type, amortization, loan term, property type, loan purpose, sales price, and appraised value.
Verification documents must be reviewed and the verified values compared to the data submitted to DU. The terms of the closed loan must match the terms of the final loan casefile submission in DU or fall within the tolerances listed in the following table:
| Data Attribute and Description | Trigger | Action Required |
|---|---|---|
|
DU loans — the result of these changes causes the DTI ratio recalculated by the lender to
* See resubmission examples below. |
Loan casefile must be resubmitted to DU |
| Interest rate on fixed-rate and adjustable-rate mortgages | Interest rate decreases, not as the result of a permanent interest rate buydown | No resubmission required |
| Interest rate on fixed-rate and adjustable-rate mortgages | Interest rate decreases as the result of a permanent interest rate buydown |
Loan casefile must be resubmitted to DU |
| Verified income used to qualify the borrower for loans subject to income limits; for example, as with HomeReady loans. | Income is greater than the loan application indicates |
Loan casefile must be resubmitted to DU |
| Assets — Funds Required to Close | The actual amount of assets required to close the transaction exceeds the amount of “Funds Required to Close” per the DU Underwriting Findings report | If the lender has documented sufficient liquid assets to cover the actual amount of assets required to close the transaction, no resubmission required
Otherwise, loan casefile must be resubmitted to DU |
| Assets — Reserves Required to be Verified | Due to changes in the actual amount of assets required to close the transaction, the verified amount of reserves is less than the “Reserves Required to be Verified” per the DU Underwriting Findings report | If the lender has documented reserves that equal at least 90% of the Reserves Required to be Verified per the DU Underwriting Findings report, no resubmission required
Otherwise, loan casefile must be resubmitted to DU |
| Loan amount tolerances for refinance transactions | (See below) | |
*Resubmission examples based on DTI triggers
| Original DTI | Recalculated DTI | Resubmission Required |
|---|---|---|
| 35 | 40 | Yes |
| 44 | 46 | Yes |
| 46 | 48 | No |
| 46 | 50 | Yes |
DU Tolerances for Refinance Transaction Loan Amount Changes
For refinance transactions, Fannie Mae allows the following tolerances to the loan amount:
- The loan amount may increase $500 or up to 1% of the loan amount, whichever is less.
- The loan amount may decrease 5% of the loan amount.
The loan amount tolerances are permitted provided the new LTV/CLTV does not result in
- changes to the amount of required mortgage insurance coverage,
- different loan-level price adjustments, or
- changes to loan eligibility.
For example, if a loan casefile is submitted with a loan amount of $100,000 and the appraised value is $120,000 (which equals 83.3% LTV), the actual loan amount can go up to $100,500 (which equals 83.75% LTV) without requiring resubmission.
On the other hand, if the original loan amount was $108,000 (90% LTV), an increase without resubmission is not permitted because it would result in an LTV of 91%. The higher LTV requires different mortgage insurance coverage, and may result in the loan not being eligible for delivery.
The loan amount tolerance does not apply to Fannie Mae’s requirements regarding the amount of cash back to the borrower on a limited cash-out refinance transaction. (See B2-1.3-02, Limited Cash-Out Refinance Transactions.)
For additional information, see B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report.