Do you have questions about Fannie's Day 1 Certainty?
Recently, Fannie Mae announced a new initiative that will enhance efficiency and certainty for many lenders in the U.S. home finance industry. In an environment where nothing is certain, the nation’s leading source of financing for mortgage lending introduced a program that promises to give lenders that sell to Fannie Mae protection from buyback risk. Called Day 1 Certainty, the program was announced at the Mortgage Bankers Association’s annual conference in Boston. As you might expect, lenders have had plenty of questions about the new program.
To find the answers, National Mortgage News reached out to Andrew Bon Salle, Fannie Mae’s Executive Vice President – Single-Family Business. Mr. Bon Salle is responsible for all aspects of the Single-Family business, including engagement with Single-Family customers, managing the performance of the credit portfolio, and overseeing all Single-Family capital markets activities. Mr. Bon Salle is also leading the company’s efforts to integrate with the Common Securitization Platform. What follows is an excerpt from our conversation.
Q: What is Day 1 Certainty and what does it mean for lenders?
A: Day 1 Certainty™ is Fannie Mae’s new initiative that provides our customers with freedom from reps and warrants on key aspects of the mortgage origination process.
We‘re committed to improving our customers’ experience, making it simpler, and more certain. Through Day 1 Certainty, we’re offering data validation services on income, employment, and assets through Desktop Underwriter®, our leading mortgage underwriting system. Plus, we’re providing certainty on appraisals through Collateral Underwriter® and making it easier to receive property inspection waivers on refinances. These loan components are the biggest pain points that can lead to repurchase requests.
We’re transforming the industry through technology and data innovation. We’re helping our lenders make their mortgage process quicker, more accurate, less costly, and less risky. Day 1 Certainty supports lenders’ desire to have an origination process that’s automated instead of manual.
At the heart of this initiative is our customers. Fannie Mae asked a number of lenders to test the Desktop Underwriter validation service. They told us that it streamlined their loan originations and brought efficiencies to their business processes. Lenders who piloted the validation service reported a pre-approval process measured in minutes as opposed to days; meaningful process efficiencies with processors saving approximately 90 minutes and underwriters saving 20 to 30 minutes of touch time; and 4 to 7 days saved overall. All of this efficiency also means our customers can give their borrowers a better experience – with electronic data validation, borrowers save the time and hassle of providing documents.
We have a vision to be America’s Most Valued Housing Partner. Day 1 Certainty represents a major stride forward in what we can offer the industry.
Q: Lenders have asked, “How will I have to change my business if I pursue this?”
A: Some setup is required and you may need to make a few operational updates. Step one is ensuring you have access to and are using Desktop Underwriter and Collateral Underwriter in your mortgage origination and underwriting processes. We’re here to help and you don’t have to go it alone. To get started, talk to your Fannie Mae account team, or visit www.fanniemae.com/Day1Certainty for more information and to register for training.
Beginning later this month, once you’re set up, you’ll enjoy freedom from reps and warrants for income, assets, and employment information validated through Desktop Underwriter. You’ll have freedom from reps and warrants for the appraised value of the property when an appraisal receives a qualifying risk score through Collateral Underwriter. And, use the combined power of Collateral Underwriter and Desktop Underwriter to obtain a waiver on the appraisal for eligible refinances to gain freedom from reps and warrants on the property value, condition, and marketability.
We believe the innovations that make up Day 1 Certainty will have a big impact for our customers, for the mortgage process, and give lenders the ability to offer their borrowers a dramatically better mortgage experience.
Q: Why is Fannie Mae doing this?
A: Our customers drive everything we do. Their needs are our priority. We work closely with our customers to add value, improve their experience, and move their businesses forward.
Our customers told us that they suffer from a multitude of pain points brought on by traditional paper-based mortgage processes, and the need to operate more efficiently is top of mind.
So we’re delivering new tools to help them. By leveraging borrower and property data, applying advanced analytics, and bringing key quality control processes up front, Fannie Mae is helping lenders transform their businesses. Our new Day 1 Certainty capabilities address lender feedback by driving greater transparency and a more streamlined mortgage origination process.
Our goal is to help our customers succeed in the mortgage business and serve their customers more efficiently. We’re offering tangible solutions through Day 1 Certainty.
Get started today. Contact your Fannie Mae account team or visit www.fanniemae.com/Day1Certainty.