I have to say that some of the language is confusing after reading the whole Announcement. See
https://www.efanniemae.com/sf/guides.../2008/0808.pdf
There seems to be a delineation to drawn between manual reviews and automated underwriting. That is to say, that it seems that the consideration of authorized user accounts, or non-consideration, only comes into light in the context of manual reviews.
Is that a correct reading of the above?
I think so because the Announcement clearly states that Desktop Underwriter will not consider AU accounts whatsoever. That is a clear violation of the ECOA insofar as I presume that DU is tri-merge of sorts with more data but, certainly credit information and a score. Again, the ECOA states these must be scored or the model is invalid. Further, whatever lender that uses such a model may be found liable thereunder.
However, and thereafter, the Announcement goes on to state that in instances where the lender has occasion to note that a spouse is a holder an account whereupon the applicant is an authorized user, the account must be manually underwritten and by extension, I deduce the entire application.
My question is how would the lender have such occasion to note this since it isn't apparent from the tradeline itself? Moreover, how does the lender "manually" underwrite something that has been omitted?
There is also language that states that accounts shall be scored if the applicant can provide written documentation that they've paid the account themselves for 12 months. That is ambigious. What does "documentation" mean? Seems that it implies anything on a piece of paper which could lead to outright fraud and probably will.
Then there is the second paragraph which states AU accounts must be scored if the holder spouse ins't involved in the transaction. What if they are, does the account not receive consideration? That is the inference I take away. If I am correct, that could lead to considerable litigation.