Fannie Mae gave mortgage companies the green light to use third-party digital providers to verify income and assets information. Unsurprisingly, mortgage technology firms are thrilled.
IN June 9 note, the state-sponsored organization told mortgage services that they can make the change immediately. Service centers may use a third party provider to verify the information that the borrower provided in their application for mortgage assistance.
Fannie Mae also noted that maintainers will be responsible for “the security, accuracy and integrity of information obtained from a third-party verification service provider.” Maintenance personnel must also obtain legal authorization to use a third-party vendor and must retain all verification reports in the loan file.
This flexibility is expected to help mortgage servicing companies cope with the backlog of borrower requests as mortgages become available. patience… According to Mortgage Bankers Association, 2.32% Fannie Mae and Freddie Mac mortgage still in patience…
As these loans are issued out of tolerance, federal regulators have made it clear that they will watch closely how servicers handle requests from borrowers.
New updates to the GSE guidelines for Fannie and Freddie are forcing them to cap second home and investor properties to 7%. This means that a significant amount of supply must go to the non-quality sector.
Submitted by: Acra lending
In April Consumer Financial Protection Bureau said bluntly mortgage service that “unpreparedness is unacceptable.” The Consumer Surveillance Agency has told service companies that it will strengthen control and monitor how service organizations manage lenient borrowers.
“There is a wave of distressed homeowners who will need the help of mortgage workers in the coming months. Responsible service providers must prepare now. There is no time to waste and no excuse for inaction, ”said CFPB Acting Director Dave Waggio at the time.
Digital verification firms welcomed Fannie Mae’s announcement on Wednesday.
Eric Rahmel, CEO Staple, a technology company that serves mortgage loans, said the ability to report digital assets helps service providers streamline the process of reducing losses.
Service providers “no longer need to do paper chases,” Rahmel said. He added that in some cases, using digital tools to validate income and asset information can turn a weekly process into a decision in less than 30 minutes.
Using digital tools to validate asset and income information gives service companies the ability to ensure that borrowers are treated consistently, he said. Thomas Showalter, CEO of an AI mortgage firm Frankness… It’s also much better than the alternative: manually re-underwriting two million leniency loans.
“Instead, you have the opportunity to be guided by the principles of the secondary market and apply an extremely consistent approach to each borrower,” Showalter said.
But not all underwriters can be thrilled with automating their functions. It depends on the insurer: some people like digital tools because “they free them from routine tasks and allow them to do interesting things,” Showalter said.
“But I don’t know where the 20th percentile underwriter is. Maybe they feel threatened. I can tell you that his or her boss would probably like to switch from a 20 percentile underwriter to a 90 percentile underwriter. ”