An MLO receives a DU finding of 'Refer' with a message indicating 'Multiple Financed Properties.' The borrower owns two rental properties and is purchasing a primary residence. What does this DU message most likely indicate?
Correct Answer
B) DU requires manual underwriting due to the complexity of multiple property ownership
When DU encounters multiple financed properties, it often refers the loan to manual underwriting because the automated system may not be able to properly evaluate the complex financial picture, including rental income calculations, cash flow analysis, and reserve requirements. This doesn't necessarily mean the loan is declined, but requires human underwriter review.
Why This Is the Correct Answer
When DU encounters multiple financed properties, it often refers the loan to manual underwriting because the automated system may not be able to properly evaluate the complex financial picture, including rental income calculations, cash flow analysis, and reserve requirements. This doesn't necessarily mean the loan is declined, but requires human underwriter review.
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A borrower's credit score drops from 740 to 680 between the initial application and underwriting review. This change affects the interest rate from 4.25% to 4.75%. What action must the lender take regarding the Loan Estimate?