Fan­nie Mae is stag­ing more pi­lot projects, in­clud­ing one that con­sol­i­dates sub­mis­sions of dif­fer­ent types of loan data po­ten­tially el­i­gi­ble for im­me­di­ate rep and war­ranty re­lief.

National Mortgage News - - Contents - By brad finkel­stein and bon­nie sin­nock

Fan­nie Mae ex­pands Day 1 Cer­tainty pro­gram

fan­nie mae is ex­pand­ing the pi­lot projects it has in place to test hous­ing ini­tia­tives and pro­ce­dural im­prove­ments, in­clud­ing one that con­sol­i­dates sub­mis­sions of Day 1 Cer­tainty data.

Fan­nie is cur­rently test­ing sin­gle- source val­i­da­tion of bor­rower’s as­sets, in­come and em­ploy­ment that could qual­ify lenders for im­me­di­ate rep­re­sen­ta­tion and war­ranty re­lief on these data points, Pres­i­dent and CEO Ti­mothy May­opou­los an­nounced at the MBA’s An­nual Con­ven­tion & Expo in Den­ver last month.

The sin­gle source re­port, which is on track for roll­out to the broader mar­ket next year, an­a­lyzes data from the bor­rower’s bank ac­count, in­clud­ing pay stream and de­posit in­for­ma­tion.

The gov­ern­ment-spon­sored en­ter­prise also is look­ing for other con­cepts to test.

“We want your ideas. We want to work with lots of dif­fer­ent part­ners. If you have a new idea to make the mort­gage process bet­ter, call us. If you have a new ap­proach for cre­at­ing hous­ing op­por­tu­ni­ties for more home­own­ers and renters, call us,” May­opou­los said.

“Pi­lots help us test and learn. Some fail. But many suc­ceed. When they do, we scale the idea by rolling it out to the broader mar­ket to ben­e­fit all cus­tomers,” he said.

Since Fan­nie Mae rolled its Day 1 Cer­tainty pi­lot out to the broader mar­ket last year, more than 1,000 lenders have signed up for one or more of its ser­vices.

“These lenders ac­count for three-quar­ters of our de­liv­er­ies through Desk­top Un­der­writer. And so far, lenders have de­liv­ered more than $300 bil­lion in loans with one or more Day 1 Cer­tainty fea­tures,” May­opou­los said. The ini­tia­tive can cut the time from ap­pli­ca­tion to close by be­tween 10 and 20 days, he added.

Quicken Loans, United Whole­sale Mort­gage and For­mFree are among the com­pa­nies test­ing the sin­gle source Day 1 Cer­tainty re­port, which is on track for roll­out to the broader mar­ket next year. Fan­nie also is test­ing a ser­vice to help lenders find an­other party to ser­vice loans sold to Fan­nie if they want to en­gage in co-is­sue trans­ac­tions. It plans to roll this out to the broader mar­ket in De­cem­ber.

“It will pro­vide you with trans­par­ent pric­ing, a stan­dard­ized process, and stan­dard­ized data re­quire­ments, said May­opou­los.

Ap­prox­i­mately 15% of loans de­liv­ered by orig­i­na­tors to Fan­nie Mae in­volve an­other party that agreed to ser­vice the loan af­ter it is sold.

“To­day, this match-mak­ing does not work very ef­fi­ciently. It can take sev­eral months or more for a seller to iden­tify a ser­vicer, agree on the price, and fi­nal­ize the re­la­tion­ship,” he said.

The gov­ern­ment-spon­sored en­ter­prise also is work­ing on ap­pli­ca­tion pro­gram­ming in­ter­faces that will make it eas­ier to cre­ate soft­ware ap­pli­ca­tions, in­clud­ing one aimed at im­prov­ing its au­to­mated un­der­writ­ing sys­tem’s mes­sag­ing.

“You will be able to cus­tom­ize this in­for­ma­tion to your needs. For ex­am­ple, you can ask for only the Day 1 Cer­tainty mes­sages. Or you can look only at loans from one of your cor­re­spon­dents,” May­opou­los said.

In ad­di­tion to pro­ce­dural pi­lots like these, Fan­nie is test­ing sev­eral hous­ing ini­tia­tives, he said.

These in­clude ef­forts aimed at ex­pand­ing ac­cess to credit, in­creas­ing the fi­nanc­ing of af­ford­able rental and first-time home buyer hous­ing, and pi­lots tak­ing place as part of Duty to Serve.

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