Cloudvirga, in collaboration with Freddie Mac, has created the capability for loan officers to submit mortgage loan data to both government-sponsored enterprises' automated underwriting systems simultaneously with a single click.
Currently, if a loan officer wanted to submit to both Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Product Advisor, the user would have to pick one first and then go through several screens to validate and submit the information, get the findings back and if not, do the same thing over again with the other system.
Now, while lenders still need to pick which AUS they wish to submit the loan to, in the background Cloudvirga simultaneously sends the data to the other system as well, said Kyle Kamrooz, the co-founder of Cloudvirga.
"It's really incumbent upon the loan officer. They're bound by their own creativity and their understanding of the policies and guides" to find the GSE submission path with the least conditions and best pricing, said Rick Lang, vice president, Loan Advisor Suite strategy and integration for the single-family business at Freddie Mac. "There is no way for the average user to be that much of an expert on guidelines and policy and know every nook and cranny of both GSEs' credit box."
They provided the example of a loan qualifying for an appraisal waiver from one GSE, but not from another. Having the waiver could save the borrower money on an appraisal fee and also shorten the loan approval time.
Freddie Mac's involvement was a "philosophical thing," Lang said. "We understand we're not the only game in town, that a lender has multiple investor outlets and they want to have multiple investor outlets at the end of the day."
"We're taking it at a higher level and we believe it is in every lender's interest not only for themselves but more importantly for their borrower to get both GSEs' point of view. This is how we think the world should work, it really is in everybody's best interests," Lang said.
So when Cloudvirga approached Freddie Mac, "we were all over it," Lang continued. Leveling the competitive playing field with Fannie Mae could be a by-product of this collaboration, but at the end of the day, it is about meeting the needs of mortgage lenders and giving them both GSEs' point of view. "It is flat out the right thing to do," he said.
In June 2015, Freddie Mac stopped charging lenders a fee for submitting loans on its AUS. Fannie Mae followed suit a month later. Those moves have helped increase competition between the GSEs by removing an administrative barrier for lenders that want to compare results for individual loan applications.
Single-click submission is the next step of the digital mortgage evolution, Kamrooz said. "It's the necessary thing [in order] to go down the path of offering transparency, automation and ease of use with all the data in front of the user instantly."
Eventually, lenders will be able to submit to both automated underwriting systems with no click at all.
Ultimately — and Cloudvirga said it is working with both Fannie Mae and Freddie Mac on this — is to eliminate the use of PDF documents from the GSEs with their findings. Instead, "the system is intelligent enough to know this is a better way to go," Kamrooz said, although the user can have the capability to decide to override that decision.
This is just the first phase in a multiphase journey where at the end single-click dual AUS will be a standard and norm during the origination process, Kamrooz said.
Cloudvirga did not need Fannie Mae's permission to include DU in the single-click process because it does not change how a file is submitted to that AUS, he said.
Fannie Mae has yet to respond to a request for comment.
The one-click process does not change how lenders use DU or LPA, so those systems will still return findings for possible Federal Housing Administration eligibility, both men said.
Cloudvirga is also willing to work with lenders that have proprietary products and use their own AUS. "All we're doing right now is setting the milestone of being the industry's first but not the last platform to be able to start thinking of a process of multiple AUS with a single click or no click," Kamrooz said.