Automated verification and rent payment analysis to benefit borrowers and lenders
Fannie Mae has upgraded its Desktop Underwriter (DU) system to make getting a mortgage simpler, and potentially cheaper for lenders and borrowers.
Starting March 29, lenders will be able to use a single 12-month report to automatically verify an applicant’s income, job, and bank account information within the DU system – all in one go. Not only does this cut down on paperwork, but it can also identify things like positive rental payment history, which could help those with limited credit qualify for a loan.
“Fannie Mae is continually focused on modernizing the mortgage finance experience and exploring new ways to help our lenders open more doors for aspiring homeowners in a responsible and sustainable way,” said Cyndi Danko, senior vice president and single-family chief credit officer at Fannie Mae. “With this new update in Desktop Underwriter, we are removing a hurdle from the loan application process and bringing greater speed, simplicity, and certainty to both lenders and borrowers.”
What this means for lenders and borrowers
According to Fannie’s news release, the new DU enhancement leverages approved third-party data for asset, income, and employment verification. Lenders who opt in may experience:
- Faster time to “clear to close”
- Potential cost savings by reducing third-party reports and staff time
- Improved loan quality and reduced repurchase risk through Day 1 Certainty validation.
- A smoother experience for borrowers with less paperwork
- The ability to potentially expand approvals through automatic cash flow assessment and positive rent payment identification
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These new capabilities are the latest in a series of innovations from Fannie Mae. It has also rolled out ways to pre-qualify without impacting a credit score, tools for borrowers with nontraditional income, and helpful resources on down payment assistance and homebuying education.
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