Understanding DTI calculations and UI visibility

The Goal

Help Loan Officers understand why a borrower's DTI may appear high even when the 'Debts' tab looks manageable and exactly where to find the complete picture.

The 'Missing Debt' Paradox

A very common frustration: a borrower's Debts tab looks clean (low credit card and auto loan balances), but the system is still showing a high DTI or flagging the borrower as ineligible. Here's why.

📋 The 'Debts' Tab Shows...

Shows consumer credit debts only
Credit cards, personal loans, student loans, auto loans
What you manually review for debt consolidation decisions

🏠 The 'REO' Tab Shows...

Shows property-secured obligations
First mortgage payments, second liens, HELOCs
Mortgage payments of $2,000–$3,500/month are common here — these are major DTI drivers

ℹ️ Rule of Thumb

Credit cards and consumer debts → Debts tab

Mortgage payments and property liens → REO tab

Both are included when the system calculates your borrower's final DTI

How the Underwriting Engine Sees Debt

The automated underwriting system maintains a comprehensive view that combines data from across the application. When calculating the final DTI, it aggregates:

Consumer Debt: from the Debts tab
Mortgage Payment A: from the REO section (e.g., $2,547/month)
Mortgage Payment B: any second lien (e.g., $1,075/month)
Qualified HELOC Payment: calculated at the fully indexed rate for the requested line size

⚠️ Why Pre-Approval Can Flip to Ineligible

If an automated data refresh brings in a previously undisclosed or misclassified mortgage payment, the DTI may suddenly exceed the product threshold

This is not an error the engine is correctly incorporating the full picture of the borrower's obligations

Always verify REO section entries before presenting a pre-approval to the borrower

Step-by-Step: Diagnosing a High DTI

Navigate to the loan and open the 'Debts' tab confirm consumer debts are accurate
Navigate to the 'REO' tab review all listed mortgage payments
Confirm the monthly payment amounts are correct (typos or stale data here are common)
Check the loan summary page the DTI shown here is always the complete figure
If you believe an REO entry is incorrect, update it and the system will automatically recalculate DTI and CLTV

✅ Faster Diagnosis

When a loan flags ineligible unexpectedly, go to REO first not Debts. Mortgage payments are the highest-impact DTI driver and the most commonly missed.

Any change to the property value or loan amount automatically triggers a full recalculation you don't need to manually refresh