Fannie expands Day 1 Certainty program

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DENVER — Fannie Mae is expanding the pilot projects it has in place to test housing initiatives and procedural improvements, including one that consolidates submissions of Day 1 Certainty data.

Fannie is currently testing single-source validation of borrower's assets, income and employment that could qualify lenders for immediate representation and warranty relief on these data points, President and CEO Timothy Mayopoulos announced at the MBA Annual Convention here.

The single source report, which is on track for rollout to the broader market next year, analyzes data from the borrower's bank account, including pay stream and deposit information.

The government-sponsored enterprise also is looking for other concepts to test.

"We want your ideas. We want to work with lots of different partners. If you have a new idea to make the mortgage process better, call us. If you have a new approach for creating housing opportunities for more homeowners and renters, call us," Mayopoulos said.

"Pilots help us test and learn. Some fail. But many succeed. When they do, we scale the idea by rolling it out to the broader market to benefit all customers," he said.

Since Fannie Mae rolled its Day 1 Certainty pilot out to the broader market last year, more than 1,000 lenders have signed up for one or more of its services.

"These lenders account for three-quarters of our deliveries through Desktop Underwriter. And so far, lenders have delivered more than $300 billion in loans with one or more Day 1 Certainty features," Mayopoulos said. The initiative can cut the time from application to close by between 10 and 20 days, he added.

Quicken Loans, United Wholesale Mortgage and FormFree are among the companies testing the single source Day 1 Certainty report, which is on track for rollout to the broader market next year.

Fannie also is testing a service to help lenders find another party to service loans sold to Fannie if they want to engage in co-issue transactions. It plans to roll this out to the broader market in December.

"It will provide you with transparent pricing, a standardized process, and standardized data requirements, said Mayopoulos.

Approximately 15% of loans delivered by originators to Fannie Mae involve another party that agreed to service the loan after it is sold.

"Today, this match-making does not work very efficiently. It can take several months or more for a seller to identify a servicer, agree on the price, and finalize the relationship," he said.

The government-sponsored enterprise also is working on application programming interfaces that will make it easier to create software applications, including one aimed at improving its automated underwriting system's messaging.

"You will be able to customize this information to your needs. For example, you can ask for only the Day 1 Certainty messages. Or you can look only at loans from one of your correspondents," Mayopoulos said.

In addition to procedural pilots like these, Fannie is testing several housing initiatives, he said.

These include efforts aimed at expanding access to credit, increasing the financing of affordable rental and first-time home buyer housing, and pilots taking place as part of Duty to Serve.

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Vendor management GSEs Data and information management Underwriting Risk management Fannie Mae