Fannie Mae s Day 1 Certainty Wholesale Revised 4/5/17
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Day 1 Certainty Overview
Millennial State of Mind Borrowers in today s market want a: + Simple + Streamlined + Consolidated + and Certain approach to residential finance The use of technology makes the home finance process easier allowing home buyers to utilize their time more efficiently through: 1. Reduced paperwork 2. Faster turn times between processing and underwriting 3. Accelerated closings
Day 1 Certainty When using conventional products with Desktop Underwriter (DU approvals), Day 1 Certainty offers optional electronic validation of borrower data for: Income Assets Employment
Available Tools To maximize the use of technology we have the ability to electronically verify: Income Assets Credit Employment Tax Transcripts Underwriting Property Inspection Waivers Risk Assessments of Appraisals Income Assets Employment Income/Employment validation is completed through The Work Number, Asset validation is completed through AccountChek and all seamlessly interface with DU
Steps to Day 1 Certainty Fannie Mae Day 1 Certainty
Income and Employment Verification Income and Employment verification is completed through The Work Number/Equifax 4506T and immediately validated though Automated Underwriting (AUS) Income: Eliminates the need to collect pay stubs, W2s, tax transcripts and other related income documentation Instant validation also eliminates additional underwriting income calculations which can enhance turn times Pay Structure Type Base Pay Bonus Overtime Commission < 25% The Work Number 4506T Transcript Service Commission 25%+ Social Security Retirement (Pension, Annuity) *Self-employed income AUS Integrations *Sole Proprietorship and Schedule C borrowers
4506T Form A 4506T for is still required to be signed both at application and funding, but does not have to processed for income that validated through the Work Number Borrowers receiving social security, retirement, Schedule C self-employed income or if 25% or greater of their income is from commission tax transcripts are used to validate their income Pay Structure Type Base Pay Bonus Overtime Commission < 25% Commission 25%+ Social Security Retirement (Pension, Annuity) *Self-employed income 4506T Transcript Service *Sole Proprietorship and Schedule C borrowers
DU Findings with The Work Number Verification: The Work Number findings are directly in integrated into the DU findings
DU Findings with The Work Number Income Verification: Fannie Mae Day 1 Certainty
DU Findings with 4506-T Verification: Fannie Mae Day 1 Certainty
DU Findings with Work Number Employment Verification: Fannie Mae Day 1 Certainty
Asset Verification Asset Verification is completed through FormFree s AccountChek Income: Eliminates the need to collect bank statements Instant validation also eliminates additional underwriting income calculations which can enhance turn times Large deposits are required to be sourced in accordance with Fannie Mae Once asset verification is run, DU will review and provide direction on requirements Asset Type Checking, Savings CD Money Market Mutual Funds Retirement Accounts AccountChek
Asset Verification Direct verification by a third-party asset verification vendor (i.e., use of AccountChek) is only allowed by PRMG on conventional loans.
DU Findings with AccountChek Verification: Fannie Mae Day 1 Certainty
DU Findings with AccountChek Verifications: Fannie Mae Day 1 Certainty
Lender Responsibilities Must ensure compliance with all DU messaging Ensure vendor reports match any information the borrower provided or is contained in the loan application Must review the borrower s information and the application provided by the borrower Investigate information to determine the appropriate amount of income or assets to be provided on the DU loan application. This includes investigating any conflicting or contradictory information
Day 1 Certainty Recap Order reports, review and addresses any discrepancies with the borrower Enter information into DU and submit DU obtains a duplicate copy of the report from the vendor using loan number or reference number DU performs its own income and asset calculations to arrive at a value that is compared to DU Employment status can also be validated DU returns specific messages related to the loan components that have been submitted for validation Income is validated on a per-borrower and perincome type basis Assets are validated on a loan-level basis. Employment is validated on a per-borrower and peremployer basis Ability to take advantage of processing and underwriting efficiencies for components that have been validated
Day 1 Certainty https://www.fanniemae.com/singlefamily/day-1- certainty https://www.fanniemae.com/singlefamily/desktopunderwriter-validation-service
Questions? PRMGUniversity@prmg.net