Finance
A Minnesota borrower's application discloses an undisclosed $450/month student loan payment that was not included in their original DTI calculation. The underwriter discovers this. What will happen?
AThe loan is automatically denied due to the omission
BThe underwriter will recalculate DTI including the student loan and evaluate qualification✓ Correct
CThe borrower must close immediately before further review
DThe student loan is ignored since it is not a mortgage
Explanation
When an undisclosed debt is discovered during underwriting, the underwriter recalculates the DTI including the new debt. If the borrower still qualifies within guidelines, the loan may proceed. If the DTI now exceeds guidelines, the loan may be denied or the borrower may need to pay down the debt or find a lower purchase price. Accurate disclosure on loan applications is legally required.
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