Fannie Mae Announces Credit Related DU Upgrades
Fannie Mae has announced three enhancements of data used through its Desktop Underwriter (DU) system which it says will bring more certainty and simplicity to lenders, employ stronger data capabilities, and help borrowers have access to sustainable mortgage credit.
- Trended credit data - This new data will be provided by Equifax and TransUnion to allow a more thorough analysis of borrower credit history. The credit reports currently used indicate only the outstanding balance and if a borrower has been on time or delinquent on existing accounts such as credit cards, mortgages or student loans. With trended credit data, lenders will have access to a borrower's monthly payment amounts over time, allowing lenders to determine if the borrower tends to pay off revolving credit lines such as credit cards each month, or carry a balance from month-to-month while making minimum or other payments. DU will be updated to utilize this trended credit data which will be required for use in underwriting single-family mortgages by mid-2016. Fannie Mae will provide additional guidance to lenders in the coming months.
- Nontraditional credit history - Fannie Mae is building a new DU capability to help lenders better serve borrowers who lack a traditional credit history. The current process requires that lenders underwrite loans for these borrowers manually. The new functionality will be available in 2016.
- Data validation - In 2016, Fannie Mae data validation services will also be available through DU. Instead of requiring a borrower to provide copies of pay stubs or other documents, lenders will be able to validate income through Desktop Underwriter with data provided by Equifax's The Work Number®. In addition to efficiency for borrowers and lenders, this could reduce the frequency of mortgage fraud. Going forward, Fannie Mae will determine if validation services can be offered for additional borrower data, such as bank statements, and additional income documents, such as tax returns.
In addition to these changes to Desktop Underwriter Fannie Mae also announced a new ConnectTM self-service reporting and data analytics portal for customers and business partners. This new tool will be a one stop source for users to access data and analytics they need with a single sign-on, replacing multiple legacy systems. Users can customize their access and reporting categories, receive email notifications of new reports, and provide feedback to Fannie Mae via an online comment box. A beta version of Fannie Mae Connect is currently being tested, and the full system with new reports will be available in November.
"Fannie Mae wants to be the partner of choice for lenders," said Timothy J. Mayopoulos, President and Chief Executive Officer, Fannie Mae. "Our aim is to help lenders serve their customers efficiently so that more qualified borrowers have access to mortgage credit. We are enhancing our offerings, improving our tools and innovating through the technology we provide to our customers. Our goal is to make sustainable homeownership a reality in communities across the country while reducing risk for taxpayers."