Fannie Mae has given mortgage servicers the green light to utilize third-party electronic vendors to verify income and asset information. Unsurprisingly, mortgage technology companies are thrilled.
In a June 9 note, the government-sponsored thing told mortgage servicers they could implement the changes instantly. Servicers can use a third-party seller to validate the information that the debtor provided in their own mortgage assistance program.
Fannie Mae also noted that servicers will be responsible for the”security, accuracy, and integrity of the information obtained from the third-party verification vendor.” Servicers should also obtain legal authorization to utilize a third party seller, and must retain all verification reports from the loan file.
The flexibility is expected to assist mortgage servicers work through the backlog of borrower asks as mortgages come out of forbearance. According to the Mortgage Bankers Association, 2. 32% of Fannie Mae and Freddie Mac mortgages are nevertheless in forbearance.
As those loans come from forbearance, federal regulators have made it crystal clear that they will be closely monitoring how servicers navigate requests from borrowers.
New GSE principle updates to Fannie and Freddie compels them to limit the amount of second home and investor properties delivered at 7 percent. This usually means a significant amount of supply might have to come to the non-QM Sector.
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In April, the Consumer Financial Protection Bureau bluntly told mortgage servicers that”unprepared is unacceptable.” The consumer watchdog agency advised servicers it might ramp up enforcement and track the way that servicers handle borrowers coming from forbearance.
“There is a tidal wave of distressed homeowners who will need help from their mortgage servicers in the coming months. Responsible servicers should be preparing now. There is no time to waste, and no excuse for inaction,” CFPB acting Director Dave Uejio said at the moment.
Firms that offer digital verification services welcomed Wednesday’s announcement from Fannie Mae.
Eric Rachmel, CEO of Brace, a mortgage servicing tech firm, said that being able to provide a digital advantage report helps servicers streamline the loss mitigation procedure.
Servicers “no longer need to do the paper chase,” Rachmel sai