Note: Your lender must do this fix.
Loan professionals need to know specific directions on how to use the Fannie Mae DO/DU automated underwriting system (AUS) workaround when a Refer/Caution is received and the denial is due to a short sale coded as a foreclosure. IMPORTANT: You must be in Desktop Originator/Desktop Underwriter to make this fix! It will not work in your Loan operating system!
Loan originators, upon receiving Refer/Caution:
- Within (1)Fannie Mae DO or DU automated underwriting system, go into (2)Edit Loan: then (3)Full 1003 and then (4)Declarations, then (5) In dropdown box, change to (6)Yes.
- Click on (7)Explanation button at bottom right.
On (8) Declarations Explanation page:
- If strictly trying to correct a FORECLOSURE code noted on findings for a short sale, enter on line c.: Confirmed CR FC Incorrect
- If “Extenuating Circumstances” and are trying to get DU/Fannie Mae approval at 2 years after short sale, enter on line c.: Confirmed CR FC EC