Undisclosed Debt MonitoringTM (UDM), developed by Equifax, offers a simple, yet unique way to help lower loss severity rates, reduce reserve requirements and restore long-term confidence in the mortgage origination process. UDMTM continuously monitors a borrower’s files for increased credit activity during the quiet period between the original credit file pull and loan closing. Nearly 14 percent of all mortgage borrowers, including those with solid credit scores and debt-to-income (DTI) ratios, apply for at least one new trade line during this period. A mere 3 percent increase in DTI during the quiet period can derail the origination process and results in costly loan repurchase demands. UDMTM provides daily alerts to lenders, mortgage insurers and investors about activity that may represent potential risks associated with mortgage loans in their pipelines.
Undisclosed Debt MonitoringTM
Another option might be a Refresh Report. With a Refresh Report, you can obtain an updated copy of the borrower’s credit report through use of a “soft inquiry,” done generally just before a loan is closed. Find out more here.