Desktop Underwriter: Fannie Mae’s Automated Mortgage Underwriting Expert System

David W. McDonald, Charles O. Pepe, Henry M. Bowers, Edward J. Dombrowski

Fannie Mae, the nation’s largest source of conventional mortgage funds, has made a commitment to use technology to improve the efficiency of processing a loan by reducing the time, paperwork and cost associated with loan origination. The Desktop Underwriter (DU) system which was developed as a result of this commitment, is an automated underwriting expert system that applies both heuristics and statistics to the problem. The system supports both the wholesale and retail mortgage environments and is built to reason and underwrite loans with incomplete, unverified and conflicting data.

The system generates a credit recommendation based on the loan’s conformity to credit standards and an eligibility recommendation based on the loan’s conformity to eligibility requirements. DU is already having a major impact on the mortgage industry. The system helps standardize how the Fannie Mae underwriting guidelines are interpreted, reduces discrimination by removing subjective reasoning from the decision process and reduces the cost of manual underwriting for both lenders and Fannie Mae.


This page is copyrighted by AAAI. All rights reserved. Your use of this site constitutes acceptance of all of AAAI's terms and conditions and privacy policy.