What are DU Findings for Walnut Creek Mortgages
What are DU Findings and why do agents ask for them when making an offer?
Hey everybody, Craig Bosse here and today we’re talking about DU Findings. What a fun topic. What the heck are they and why are agents asking for them, specifically, listing agents will ask for them a lot of the times when they’re considering offers. What they’re looking for there is just to try to back up the pre-approval and take a look at the finer details of the approval and find out if this person is qualified. There’s some ups and downs to that and we’ll get into that here shortly.
What DU Findings are is the loan officer goes into their loan origination system, puts in all the info, such as the income, assets and then pulls the credit, all of it goes together into an algorithm and that spits out either an approve or a deny. You can see that right here … well, I guess not. Anyway, it’s fully automated. They don’t really consider any of the documents that are in the file, it’s just solely what is plugged into the system by the loan officer.
That being said, it’s garbage in, garbage out. If you have a loan officer who is not very experienced or doesn’t know the guidelines, they can easily get an approval and then it ends up being denied later when it gets in front of an actual underwriter because they go in and adjust everything and run it again.
Common things that we see are income issues usually. The client will go in and put in how much they made last month, let’s say for example and last month they worked a ton of overtime. Problem is, it’s averaged over two years. That’s a big one. Self employed income, a lot of times, they just think about what kind of money is coming into them, they don’t really think about, we’re going off of taxes to qualify. Those are some of the pitfalls that you can get into there. Also, if there are other issues that aren’t on the credit report, say, I don’t know, that of foreclosure or something and it’s not on the credit report, it could show up later on and get denied.
Is there a better way to do this? Yeah there is. Get it in front of a real underwriter, before you even get in the car, before you go out looking for houses, spending all the time and energy doing that, get the file in front of a real underwriter who’s gonna have the final decision on whether or not they get the loan for the property. Something that we do here. If you have any questions or comments, you can reach me here and thank you for watching.