What Is a DU in a Mortgage?

A mortgage is a loan on a house.

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

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.

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.

references