Multifamily Lenders Like What They See in Fannie Mae’s New DUS Portal
By Tim Ahern | June 07, 2016
Fannie Mae’s new DUS Gateway™ loan sourcing platform represents a major shift in how Delegated Underwriting and Servicing (DUS®) lenders work with the company’s multifamily division to provide financing for workforce and affordable rental housing across the country.
Lenders like M&T Realty Capital Corporation say that adjusting to the new platform has been relatively easy, and well worth the effort.
“This is such a radical departure from the past, where some of the applications were getting older and the interface was old,” says Steven Haas. He is the IT team lead for the DUS lending group at M&T Realty Capital and serves on the Fannie Mae advisory board for the Mortgage Bankers Association.
“I think they are doing a wonderful job of reducing the burden on the lender as much as they can,” says Haas. “The software is easier to use. And, they are building from the start abilities to upload stuff that we used to have to put in manually. It’s gotten so much better working with them.”
Fannie Mae's multifamily division is in the midst of a major, multi-year initiative to overhaul its technology and make it easier for its customers to do business with the company. DUS has received full attention in this effort because it is the principal source of Fannie Mae’s multifamily loan deliveries.
In partnership with its 25 DUS lender partners, the multifamily division has built a book of business of well over $200 billion since Fannie Mae initiated the program in 1988.
Over that period, DUS has performed admirably during both good times and bad. Multifamily says DUS is successful because of its unique risk-sharing business model in the multifamily mortgage industry.
Under the model, designated DUS lenders have the authority to underwrite, close, deliver, and service multifamily loans on behalf of Fannie Mae. The loans must conform to Fannie Mae’s standards. In exchange, DUS lenders share the risk of losses on the loans – if incurred – over the life of the loan. Lenders generally retain one-third of the underlying credit risk on each loan they sell to Fannie Mae.
Getting Rid of Repeated Data Entry
One of the chief sources of complaints about Fannie Mae’s old loan processing system was having to enter the same pieces of data over and over throughout the transaction process. Haas refers to “the reentry of data continuously” when the lender submitted a deal, when Fannie Mae reviewed and approved it, when the deal was priced, and more.
Under DUS Gateway, he says, “A lot of the data now slides forward as you move forward with the loan.” That eliminates transcription and misspelling errors occurring from repeated data entry. “The new system is making everybody’s life easier, approvals and the whole process are going faster, and that makes the lenders more competitive.”
When DUS Gateway went live in June 2015, DUS lenders for the first time had a common platform for submitting, reviewing, and approving transactions; uploading documents; and actively collaborating on deals.
Like Haas, users generally have greeted the new system as a welcome departure from the days of transacting business through a combination of Excel spreadsheets, Word documents, emails, and a couple of single-family applications.
Better, Faster, and Easier Execution
“The launch of DUS Gateway means best-in-class service to customers. It is making Fannie Mae’s execution better, faster, and cheaper,” says Fannie Mae’s Peter Coccaro. He has been leading a team of about 40 to build DUS Gateway and continues work on the portal, enlisting Haas and other industry representatives to test some of the innovations before rolling them out.
Coccaro points out that his Fannie Mae technology team has been using an Agile software development process to implement DUS Gateway, which has proven advantageous. “This has allowed for increased speed to market and allows for multiple releases in a year, enabling us to more quickly meet market demands,” he adds.
Using Salesforce to build DUS Gateway has also brought good results. “It’s a world-class customer relationship management tool, out of the box.” The cloud-based portal for lenders is easy and quick to change to meet evolving business, he says. “And its flexibility can support a variety of business needs.”
Coccaro estimates that DUS Gateway is reducing the time it takes to register a new multifamily transaction by 30-40 percent.
“By centralizing all pipeline activity between multifamily and its customers in one place, it eliminates redundancies, saves time, and increases accuracy,” he adds. “Gone are the multiple systems for transaction submissions and the use of email to manage the front-end process.”
The work continues, and Haas says he is excited about the Fannie Mae team preparing to build an automated upload capability for submitting data.
Haas notes that an improved user interface and a very logical approach have eased the transition to DUS Gateway. Users have had minimal problems adapting, he says. Also, he hasn’t noticed anyone whining about the new system, which is sometimes the response he sees when changes are afoot.
Tim Ahern is a writer in Fannie Mae’s corporate communications department.