"What this is all about is good old Fannie Mae trying to keep up with the young upstarts who are starting to nip at the heels of the traditional lenders; online startups are popping up every day that are threatening to make the residential lending process easier, faster, and totally online,” Marc Israel, president of MiT National Land Services, told Mortgage Professional America. “These newbies are also using new methods for analyzing creditworthiness that vary from your old man’s underwriting.
Last week, Fannie Mae announced a new initiative that will allow borrowers with non-traditional credit history easier access to attaining mortgages.
“Fannie Mae is building a new capability through its industry-leading Desktop Underwriter automated underwriting system to help lenders more efficiently serve borrowers who do not have a traditional credit history,” Fannie Mae said in a release. “Currently, Fannie Mae requires lenders to use a manual process to underwrite loans made to these borrowers.
According to Israel, Fannie Mae is trying to help lenders keep up before they all get swept away by online startups.
It’ll likely be a welcome addition to brokers’ repertoire, especially considering Freddie Mac’s recently announced partnership with one of the country’s largest online lenders.
The two announced the partnership at the recent Mortgage Bankers Association Conference in San Diego. They are partnering on products targeting millennials and first-time buyers, among others.
"We are leveraging our unique strengths to explore simple straightforward approaches to mortgage products, technology and borrower outreach strategies,” Dave Lowman, executive vice president of the single-family division at Freddie Mac, said in a release. “We then hope to use the results from these efforts to make it easier for all of our customers, and the industry, to make successful homeownership possible for a wider range of qualified borrowers."
A new initiative by Fannie Mae will benefit lenders and originators, according to one industry player.