Selling Guide

The Selling Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Selling Guide in PDF format.

View All Selling Policy Updates

Download PDF

Hint: Ask in a form of a question.

B3-2-09, Erroneous Credit Report Data (01/27/2015)


This topic contains information on erroneous credit report data, including:


Erroneous Credit Report Data

The lender is responsible for ensuring that credit report data used by DU in its underwriting analysis is accurate. Significant, material credit errors in a borrower’s credit report may have a negative impact on the underwriting recommendation from DU.

When there is documented evidence of material erroneous credit data, the underwriter should work with the credit repository to correct the data and resubmit the loan casefile to DU for underwriting. If there is not enough time to obtain corrected information, or if there are extenuating circumstances that contributed to the derogatory credit, the lender may manually underwrite the mortgage.

If significant material credit errors in the credit report have had a negative impact on the underwriting recommendation from DU resulting in a Refer with Caution recommendation, the lender may consider underwriting the loan manually in accordance with this Selling Guide, provided that the loan product or transaction otherwise allows for delivery of manually underwritten loans.

If the loan complies with Fannie Mae’s standard eligibility and underwriting guidelines, it must be delivered as a manually underwritten loan with SFC 343. Such manually underwritten loans are not eligible for DU’s limited waiver of representations and warranties.


Merged Credit Reports and the Impact on DU’s Evaluation

Errors that are the result of the credit merge do not typically affect the credit or risk analysis of the loan casefile.

DU attempts to identify duplicate tradelines, including public record items, that are the result of the merge, and ignores duplicate accounts in the credit analysis.

Public record information is frequently duplicated on the credit report because the credit agencies do not attempt to merge or match items of this severe nature. A public record item may appear in the credit report three times—once from each repository—but the duplication will not affect the risk analysis of the case.


Lender Action Regarding Derogatory Credit Reported in Error

If it is determined that significant derogatory credit has been reported in error, the lender must obtain written documentation that supports the error. The following types of written documentation support erroneous information:

  • a supplement to the credit report

  • a new mortgage credit report,

  • documentation from the credit provider that reported the error.

Related Articles

B3-2-01, General Information on DU (08/07/2018)

IntroductionThis topic contains general information on DU, including: Overview  Underwriting with DU  DU Underwriting Reports  Loan...

Read more

B3-2-02, DU Validation Service (07/03/2019)

IntroductionThis topic contains information on the DU validation service, including: General Information  Authorized Vendors and Verification...

Read more

B3-2-03, Risk Factors Evaluated by DU (12/04/2018)

IntroductionThis topic contains information on the risk factors evaluated by DU, including: Risk Factors Evaluated by DU  Credit History ...

Read more

B3-2-04, DU Documentation Requirements (03/31/2015)

IntroductionThis topic contains information on DU documentation, including: Required Documentation for the Permanent Loan File  DU Documentation...

Read more

B3-2-05, Approve/Eligible Recommendations (01/27/2015)

IntroductionThis topic contains information on Approve/Eligible recommendations. Approve/Eligible Recommendations The following table describes these...

Read more

B3-2-06, Approve/Ineligible Recommendations (01/27/2015)

IntroductionThis topic contains information on Approve/Ineligible recommendations. Approve/Ineligible Recommendations These recommendations do not take...

Read more

B3-2-07, Refer with Caution (01/27/2015)

IntroductionThis topic contains information on Refer with Caution recommendations, including: Overview of Refer with Caution Recommendations  Lender...

Read more

B3-2-08, Out of Scope Recommendations (04/01/2009)

IntroductionThis topic contains information on Out of Scope recommendations.  Out of Scope RecommendationAn Out of Scope recommendation indicates...

Read more

B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report (12/04/2019)

IntroductionThis topic contains information on the accuracy of DU data, DU tolerances, and errors in the credit report, including: Ensuring DU Data and...

Read more

B3-2-11, DU Underwriting Findings Report (10/24/2016)

IntroductionThis topic contains information on the DU Underwriting Findings report, including: Overview  Potential Red Flag Messages  ...

Read more

What are general lender requirements when underwriting with DU?

General Lender RequirementsWhen underwriting loans with DU, the lender must: employ prudent underwriting judgment in assessing whether a loan casefile...

Read more

What is required when employment is validated through DU validation service?

Employment ValidationThe following additional information applies to employment validated by DU: The vendor may offer options for lenders to obtain...

Read more

How does DU consider liquid reserves?

Liquid ReservesLiquid reserves are those financial assets that are available to a borrower after a loan closes. Reserves are calculated as the total...

Read more

How does DU evaluate credit inquiries?

InquiriesDU evaluates inquiries made within the most recent 12 months of the credit report date. Research has shown that a high number of inquiries can...

Read more

How does DU evaluate revolving credit utilization?

Revolving Credit UtilizationThe establishment, use, and amount of revolving credit a borrower has available are important. Trended credit data is used to...

Read more

What is the archive policy for DU loan casefiles?

Loan Casefile Archival PolicyDU loan casefiles are archived and no longer retained in DU 28 months from the date the loan casefile was last updated. This...

Read more

What can I do if a loan casefile receives a Refer with Caution recommendation?

Lender Response to a Refer with Caution RecommendationWhen a loan casefile receives a Refer with Caution recommendation, the lender should:  Review...

Read more

Is there a payment shock policy for fixed-rate mortgages?

Desktop Underwriter (DU) considers the following characteristics in the credit report to assess the creditworthiness of borrowers who have traditional...

Read more

When does a loan need to be resubmitted to DU?

Ensuring DU Data and Delivery Information AccuracyThe data submitted to DU must reflect the loan as it was closed, including occupancy type, product type,...

Read more

What is required when assets are validated through DU validation service?

Asset ValidationThe following table lists the asset types that can be validated and the documentation that DU will require, which may be different than...

Read more

What are the DU tolerances for refinance transaction loan amount changes?

DU Tolerances for Refinance Transaction Loan Amount ChangesFor refinance transactions, Fannie Mae allows the following tolerances to the loan amount: The...

Read more

Can loans be submitted to DU after the closing of the mortgage loan?

Underwriting with DULoans may be submitted to DU before or after the closing of the mortgage loan; however, the first submission to DU for...

Read more

Have guide questions? Get answers to all of your policy questions, straight from the source.

Get Started
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.

Email Us
If you still have Technical Support questions, feel free to