Remarks Adapted from Comments Delivered by Timothy J. Mayopoulos, President and CEO, Fannie Mae
It is a pleasure to be in this beautiful city and at this convention, where I get to connect with so many customers, friends, and partners. It is always a great event, so thank you for having me.
I think back on this event three years ago, in Las Vegas. I said there that Fannie Mae’s vision is to be America’s most valued housing partner.
Since then, we have worked hard to make that vision real.
We have introduced a stream of innovative solutions to help you meet your most important business challenges. At every step, we have taken on your challenges as our challenges. We listened to your feedback, and used it to make the solutions we offer better and smarter.
Last year, in Boston, we delivered Day 1 Certainty™ to help you cut time and cost out of the origination process, and to help you provide a better experience to your customers.
Since then, more than 1,000 lenders have signed up for one or more of our Day 1 Certainty services. These lenders account for three-quarters of our deliveries through Desktop Underwriter®, or DU®. And so far, lenders have delivered more than $300 billion in loans with one or more Day 1 Certainty features. These lenders report cutting the cycle time from application to close by 10 to 20 days. And by saving time, they are also reducing costs.
As soon as we launched Day 1 Certainty, we worked to make it even better.
For example, we started with two validation vendors on board because we wanted to make this service available to you as quickly as possible. Since then, we have worked continuously to provide you with more choices. Now, we have 15 approved vendors, and an additional 60 resellers you can also work through.
Your voices, telling us about your pain points, led us to create Day 1 Certainty. And today, your voices are helping us improve Day 1 Certainty.
Let me share with you our next steps, based on another year of listening and learning.
First, we will introduce single source validation. Single source is the next step in the evolution of data validation. With single source, you will be able to validate many borrowers’ income, assets, and employment by running a single asset report. One. Not two or three.
This solution is now in pilot, so we can test it with live transactions and incorporate feedback. We expect to roll it out to all customers in 2018, making sure you have the broadest possible choice of vendors.
Single source validation will magnify your Day 1 Certainty time and cost savings, and make it even easier for you to originate loans.
Today, you pull multiple reports and work through multiple vendors to validate income, assets, and employment. With single source, you will be able to do all this running one report. The report will rely on source data: In other words, it will analyze data from the borrower’s bank accounts, including pay stream and direct deposit information.
In making your life easier, it will also make the borrower’s life easier.
Think of all the paper borrowers have to gather today to get a loan: Pay stubs … bank statements; sent through a fax machine that no one owns anymore.
Day 1 Certainty is already reducing this burden. With single source validation, you and your customers can make it go away, just by accessing their bank data. This represents a major step forward for everyone.
The second improvement we are introducing is on a faster track.
In early 2018, we will introduce an API platform. This will provide you with a quick and convenient way to plug into our data and technology. Whether you are a large lender, a small lender, or an in-between lender.
As you may know, API stands for “Application Programing Interface.” APIs are what allow ATMs to talk to your bank. They allow Google Maps on your phone to plug into Yelp reviews.
We are going to start making APIs business-as-usual when you do business with Fannie Mae.
We will start by introducing DU Messages API. This will provide you with all the information you use from Desktop Underwriter to originate a loan. Today, this comes to you in files that are hard to use. For example, you have to rekey the data if you want to use it in your own systems for automated processing. It can also take weeks or months to integrate into our system.
With DU Messages API, 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. You can also put the data to work as soon as it arrives. No more rekeying it into your own systems. And you can receive the instructions for the API at 9 a.m. and be integrated with our system by noon. We know that’s possible, because that was the experience of a customer that tried the pilot version.
And we are not stopping with DU Messages. We will introduce other APIs across the entire loan cycle that will make transacting business with us easier and better.
Finally, we are introducing a Servicing Marketplace. Servicing Marketplace will start to provide sellers and servicers more certainty, transparency, and efficiency for servicing transfers when a loan is sold to us.
About 15 percent of our deliveries are co-issue transactions, where a seller teams up with a servicer who agrees to service the loans after we buy them. 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.
Starting in December, Servicing Marketplace will change that. If you are a seller, it will provide a place where you can find a servicer interested in partnering with you. Or vice versa. It will provide you with transparent pricing, a standardized process, and standardized data requirements. This will mean less cost, and more transparency and certainty.
Single source validation … an API platform … and Servicing Marketplace. I encourage you to come by our booth in The HUB to learn more about all of these new solutions.
One year ago, in Boston, I said that we believed it is possible to achieve Day 1 Certainty, in real time, across a fully-digitized mortgage process.
The new solutions we are announcing today pull us toward this future. They pull us toward:
- A secondary mortgage market with less friction, less cost, and better service for you;
- A mortgage process that is faster and easier for everyone;
- And a housing finance system that is stronger, safer, and smarter.
We share with you a deep conviction: that making mortgages easier and less expensive will help you put more creditworthy borrowers into mortgages, many for the first time.
Our solutions are aimed at helping you solve your most important business challenges. But they are also aimed at helping America meet critically important housing challenges:
- They are about helping us expand access to credit for more creditworthy borrowers.
- They are about creating opportunities for new generations of homeowners and renters.
To achieve these ambitions, we need to have a bias for action and an openness to innovation. Let me say a couple of words about our approach to innovation.
Before we introduce something new, we want to make sure it works. So we test it. We have a customer, or two customers, or more, put the new tool through its paces so we can fix things.
At any given time, we may have numerous pilots in flight. Some are fairly expansive. Others, small and specialized. Some are aimed at saving you time and money, either on the selling side or the servicing side.
Other pilots are aimed at finding new ways to:
- Expand access to credit;
- Help first-time homebuyers;
- Finance affordable rental housing;
- Or do more in the Duty-to-Serve markets.
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.
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.
Find us here, at this convention. We want to talk. We want to listen. Not just here at the MBA Annual, but throughout the year and as often as we can.
We want to be the best partner we can be.
We understand that we are measured by many, including you, on our ability to help you succeed. We think that is an appropriate measure.
So we are committed to your success. Let us know, today and every day, how we can help.