Fannie Mae makes major announcement on Monday at MBA Annual Convention
By Laura Haverty | October 27, 2016
Fannie Mae President and CEO Timothy J. Mayopoulos on Monday announced Day 1 Certainty™, an initiative to provide lenders with freedom from representation and warranties (R&W) on key aspects of the mortgage origination process.
Mayopoulos made the announcement during a general session, “A Conversation with GSE Leadership,” at the Mortgage Bankers Association (MBA) Annual Convention & Expo (Oct. 23-25) in Boston. The MBA is the national association representing the real estate finance industry. Its annual meeting offers educational sessions, exhibits, and networking opportunities.
“We come to this MBA Annual meeting focused on delivering a faster, simpler customer experience. We want to make the housing finance system stronger, and we’re very much changing the way we’re interacting with you, our customers,” Mayopoulos told attendees.
“We’ve been listening to you…and continuously improving.”
Two years ago, he says, he told attendees how he intended to make Fannie Mae “America’s Most Valued Housing Partner.” Last year, he says, he outlined progress and goals to make the customer experience in working with Fannie Mae “simpler and more certain.”
“So, today, I’m really quite happy to announce that this goal of being a simpler, more certain customer experience is in fact a reality….Today, we’re delivering tangible solutions to meet the challenges of our customers,” he adds.
What is Day 1 Certainty?
Mayopoulos described three aspects to Day 1 Certainty.
First, Fannie Mae is offering income, assets, and employment validation services to lenders through its leading mortgage underwriting system, Desktop Underwriter® (DU®), he says.
Income validation is available beginning October 24, 2016.
“Starting right now, if you validate income through Desktop Underwriter, you can be certain from day 1 that we will not ask you to repurchase a loan because that income data is incorrect. That’s starting today,” Mayopoulos says.
Asset and employment validation will be available December 10, 2016, he notes. “So if you then use our tools to verify assets and employment, you’ll get freedom from representations and warranties on those as well.”
In addition, Fannie Mae will provide freedom from representations and warranties on appraised values through Collateral Underwriter® and expanded waivers of property inspection requirements on refinances.
“This Day 1 Certainty is a huge step forward for a positive, transformative mortgage origination process,” Mayopoulos says.
Attendees reacted to his Day 1 Certainty announcement with spontaneous applause.
“I am very excited to see Fannie Mae's proactive approach to expediting the mortgage process with the new Day 1 Certainty,” says Matthew Lewis, vice president and mortgage production manager of Regions Mortgage. “It sounds like a very integrated approach to make the customer experience one that the consumer will enjoy, and the mortgage sales force will embrace.”
“If we can improve the process of closing a loan and the speed at which it can be done, the overall result should increase the efficiency for all departments from sales to servicing. I cannot wait to experience these changes firsthand,” says Lewis.
“These announced innovations on improving Day 1 Certainty will dramatically help both smaller lenders in the loan production process and our homebuyer customers gain access to credit,” adds Jim MacLeod, chief executive officer of Coastal States Bank. “Speaking as one community-based mortgage lender these tools will reduce complexity on the part of the lender and help borrowers move more smoothly through a very difficult mortgage approval process,” he says.
Mayopoulos promised Fannie Mae is continuing “to listen to our customers and partner with them to deliver innovative solutions that address the nation’s most important housing challenges.”
Laura Haverty is editor in chief at Fannie Mae.