Fannie Mae has been made aware that there are often inconsistencies in the credit data when DIL and PFS events occur, and in an effort to assist borrowers in obtaining a new loan in an appropriate timeframe, DU will be updated to disregard the foreclosure information on the credit report when instructed to do so by the lender on the online loan application.
DIL = DEED IN LIEU
PFS = PRE FORECLOSURE SALE
When DU identifies a foreclosure on a credit report trade line that appears to be one that was subject to a DIL or PFS, the lender may instruct DU to disregard the foreclosure information on the credit report by entering “Confirmed CR DIL" or “Confirmed CR PFS" in the Explanation field for question c. in the Declarations section of the online loan application and resubmitting the loan case file to DU. When DU sees this indication, the foreclosure information on the credit report trade line that also has a DIL or PFS Remarks Code will not be used.
DU will issue a message stating that the foreclosure information included on the account was not used in the eligibility assessment because DU was instructed by the user to underwrite the loan case file without the reported foreclosure information. The lender must then document that the account was subject to a DIL or PFS, that the event was completed two or more years from the credit report date, and the loan case file complies with all other requirements specific to a DIL or PFS, as specified in the Selling Guide.
Note: When more than one item needs to be entered in the Explanation field, the items must be separated by a comma. For example, when the borrower has conflicting foreclosure and DIL information on one trade line and conflicting foreclosure and PFS information on another, the lender may instruct DU to disregard the foreclosure information on those trade lines by entering “Confirmed CR DIL, Confirmed CR PFS.”
For questions regarding the support of this field by a lender’s loan origination system, lenders should contact their technical support team, and may also contact their Fannie Mae Account Team for additional assistance.
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