“With the simplicity and additional certainty that Desktop Underwriter provides to lenders, more borrowers will have access to affordable, sustainable mortgage credit.”
The new capability will allow borrowers with non-traditional credit history easier access to attaining mortgages. And one broker believes this will help them better serve a large segment of borrowers.
“I think we need to continue to make prudent lending decisions but if Fannie is confident in its pcoesses and wants to open that up, I’m all for it,” Terry Collier, vice president of mortgage lending for Central Bank of Boone County, told Mortgage Professional America.
Speaking of prudent lending, Fannie Mae also announced an initiative to better capture client credit.
“This data will be provided by Equifax and TransUnion, and allows a smarter, more thorough analysis of the borrower’s credit history,” Fannie Mae said. “Currently, credit reports used in mortgage lending only indicate the outstanding balance and if a borrower has been on time or delinquent on existing credit accounts such as credit cards, mortgages or student loans.”
The GSE said one of the benefits of this change will be that it allows lenders to determine if the borrower tends to pay off credit each month, or if the borrower tends to carry a balance from month-to-month while making minimum or other payments.
To check out the full list of Fannie Mae’s changes, click here.
“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 Monday in a release. “Currently, Fannie Mae requires lenders to use a manual process to underwrite loans made to these borrowers.