You even more confused, you’re not alone if you’ve ever asked your agent or loan officer what a DU or LP is, only to receive an answer that left.
DU represents Desktop Underwriter and LP is short for Loan Prospector. Both DU and LP are forms of automatic underwriting systems (AUS). Loan originators utilize DU and LP to ascertain whether financing satisfies Fannie Mae or Freddie Mac’s eligibility needs which means that DU or LP approval is really a critical step towards shutting on a home loan.
Before we enter the nuts and bolts of those systems and just why they matter, it is crucial that individuals realize whom these Fannie Mae and Freddie Mac figures are.
Fannie Mae and Freddie Mac
Fannie Mae and Freddie Mac are government-sponsored enterprises produced by Congress to aid homeownership. They make this happen objective by buying mortgages from loan providers, combining the loans they’ve purchased, and offering them as mortgage-backed securities. Continue reading Desktop Underwriter (DU) and Loan Prospector (LP): What These are generally and Why They situation