Pam Marron Home Lending

Fannie Mae Fix out Nov.16, 2013 and Two Fixes for Erroneous Foreclosure Code on Past Short Seller Credit Working Now!

Fannie Mae Real fix3

Effective Nov. 16, 2013, Fannie Mae “Fix”!

FNMA Horizontal

Desktop Originator/Desktop Underwriter  Release Notes DU Version 9.1

Updated October 22, 2013

During the weekend of Nov. 16, 2013, Fannie Mae will roll out automated underwriting changes to Desktop Originator/Desktop Underwriter to allow lenders to make a correction when past short sales are erroneously coded as a foreclosure. This will allow past short sellers now eligible for a new mortgage to obtain an approval through the Fannie Mae automated underwriting system (AUS)!

Underwriting when Conflicting or Inaccurate Foreclosure Information Provided on DIL or PFS Tradeline

Fannie Mae has been made aware that there are often inconsistencies in the credit data when Deed in Lieu (DIL) and Pre-Foreclosure Sale (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.

Here’s how to correct the problem:

a. The past short seller needs to have proof of past short sale available (commonly received from listing realtor) and a HUD 1 closing statement to show date of the short sale (both commonly retrieved from short sale realtor or title company). Provide to lender.

b. Lender should run the Desktop Underwriter and get finding first. If Refer with Caution received (shown below), go back into 1003 loan application.

 Rfer with Caut

When DU identifies a foreclosure on a credit report tradeline 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 casefile to DU. When DU sees this indication, the foreclosure information on the credit report tradeline that also has a DIL or PFS Remarks Code will not be used.

The following is a screen shot of the Desktop Originator® (DO®)/DU User Interface that shows question c., the Explanation field, and examples of how the data should be entered on the online loan application after Nov. 16, 2013:

CR: Credit

DIL: Deed in Lieu

PFS: Pre-Foreclosure Sale/Short Sale

DU fix.12.17

c. After the correction is made, lender should rerun Desktop Underwriter again.

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.

Please Note:

    •  FHA and VA loan approvals are not commonly resulting in loan denials for past short sellers through eitherFannie Mae DU or Freddie Mac LP systems.
    • For short sales that are over 4 years ago, have your lender run through Freddie Mac LP automated underwriting system.


And, try these two solutions which are working right now, resulting in an approval:

checkmarkEffective NOW: “Submit a Complaint” at now.

This prompts a response from your lender typically within 3 days. (A visual of the 5 steps to complete and a list of documents to have ready to attach is at

CFPB Bank ltr pg 1

bank ltr pg 2

Bank Ltr pg 3

bank ltr pg 4

bank ltr pg 5

The resulting letter from your past short sale lender will have a CFPB case#.

Kelly CFPB letter

checkmark Effective NOW: Call your past short sale lender and ask for the “Executive Mortgage Complaint Escalation” phone number. Call this phone # and ask for a letter stating that your past mortgage closed as a short sale.

a. Have your HUD-1 Closing Statement and the short sale approval letter(s) for the 1st (and 2nd ) mtg. ready upon this call. Make sure to ask how long it will take to get this letter.

b.  Forward the resulting letters from CFPB and your past short sale lender to your new mortgage lender and ask them to re-pull a new credit report.

IMPORTANT: Ask your lender if they can pull credit through Kroll Factual Data or Acranet. I am having various results with different credit agencies and the greatest success has been with both of these agencies.

c. Then, have your lender rerun your loan with the new credit report through Fannie Mae Desktop Underwriting. This results in an Approve/Eligible, or an Approve/Ineligible that can be fixed with proof of the short sale date.

Letters from Lender:

Bank letter

Albright WF letter

October 27, 2013 by · 8 Comments

About Pam

Since 1985 as a loan originator, highly experienced with automated loan approvals on DU, LP, and with USDA GUS systems, thorough knowledge and use of FHA loans including 203K rehab, conventional loans including USDA, Homepath and rehab, and VA loans. After 27 years, I STILL love this business!


8 Responses to “Fannie Mae Fix out Nov.16, 2013 and Two Fixes for Erroneous Foreclosure Code on Past Short Seller Credit Working Now!”
  1. Frank says:

    Nice work – again! We need more Pam’s out there!

    • Sam Trantham says:


      I’m using this with a CLIENT NOW……invaluable……

      My company is Savvy Mortgage, and this kind of help in the industry is exactly what make us loan officers SAVVY.

      thanks for your diligence and persistence on this issue.

      Sam Trantham

  2. Jill Batrous says:

    After Taylor Bean & Whitaker went out of business, of course during my modification process, our loan was assumed by Ocwen. Ocwen then, in turn, indicated that in order to avoid a foreclosure, I would have to restart the modification process or pay the loan up in full. I chose to restart the modification process. A few months later, after speaking with Ocwen representatives multiple times who indicated the modification was still in the process, I was served foreclosure paperwork from Ocwen. I immediately called them and they stated that I had not filed a modification and that the only way to reinstate my loan was to pay the mortgage and fees up in full. Therefore, I cashed out my IRA and paid the amound in full, at least that’s what I was told. A few years went by and I received a letter from Ocwen indicating that the foreclosure was erroneously filed against me and that they would be contacting me regarding if there were any funds to be refunded to myself. After several, several calls, Ocwen again blew me off. Now Ocwen has sold my loan to another company, which is not really a big deal since I loathe Ocwen. But I just went to refinance my home and low and behold the new company states that the foreclosure fees are still attached to my mortgage and they have to be satisfied before they can refinance me. This is crazy. I am not sure how much a lawyer will cost, but I’m not sure what to do. Any idea on how I should proceed at this time? Because talking to Ocwen and the new company has been worthless.
    Sincerely, Jill

  3. Rick May says:


    Does LP have a code or any way to indicate a short sale rather than a foreclosure. Thank you very much for all of your assistance.

  4. Tinamarie says:

    Hi Pam,

    I am hoping you will be able to give me some guidance.

    One loan officer came back with a approved/eligible, and another as refer due to foreclosure in the past;

    This loan casefile has been referred because a foreclosure was indicated on the credit report

    But the foreclosure was over three years ago and deed was transferred 5/2013.

    None of them are able to explain why I am getting referred or can’t get approved.

    Maybe you can help?


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