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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 36 July 2025 T H E E X C H A N G E innovation. Innovation is in our DNA. We apply it every day to modernize the mortgage finance experience and explore new ways to make the mortgage origination process simpler, smarter, and more accessible—without com- promising our strong risk management philosophy. Q: What are some of the most impactful examples of these innovations in supporting affordable and sustainable homeownership? Evans: It all starts with Desktop Un- derwriter® (DU®), which has been the preeminent automated underwriting system in the market for 30 years. In fact, DU just turned 30 years old this past April. It comes with a suite of powerful capabilities that enable our customers to streamline and optimize workflows, pre-qualify borrowers with a soft credit check, validate income, assets, and employment with a single asset report, leverage positive rent payment history and cash flow underwriting, and so much more. DU is the cornerstone. It's used by 1,200 lenders nationwide and has en- abled $11.4 trillion in mortgage funding since 2000, helping around eight million first-time homebuyers. Since 2018, DU has reviewed about two-thirds of all conventional closed mortgage loans. A tremendous volume of business is processed through the platform each day, so it demands constant innovation to support the market as efficiently and comprehensively as possible. We are continually investing in DU to make it better. Our DU Version 12.0, which we introduced earlier this year, is helping lenders serve borrowers in multiple new ways. For instance, we've improved our ability to assess credit risk delinquency factors, which means we can say "yes" more often without sacrificing risk principles. As a result, we've seen DU approvals increase by over three per- centage points since the DU 12.0 release. We also enhanced our positive rent payment and cash flow underwriting capabilities to extend benefits to more first-time homebuyers. Since the release of our positive rent payment history enhancement, we've seen a sharp in- crease in the number of loans that have benefited; that is, those that received an approved/eligible recommendation in DU that wouldn't have previously. We've also expanded the pool of borrowers who can benefit from a cash flow assess- ment. It's no longer limited only to those without a credit score. Income Calculator is another great example of Fannie Mae innovation at work to solve a specific need. This is a new solution we introduced to the mar- ket, first in 2023 followed by a significant enhancement in 2024. It helps lenders and other mortgage professionals serve the growing number of aspiring homebuyers who are self-employed and don't have traditional sources of income. Loans to self-employed borrowers have historically been some of the most difficult and time-consuming to execute. They represent approximately 10% of the U.S. workforce and approximately 12% of Fannie Mae deliveries. Income Calculator streamlines the process and improves outcomes for both lenders and borrowers. It removes complexity for lenders for a variety of self-employed business structures and maximizes borrower income for qualification. It also increases certainty of loan quality, which our lenders have asked for. Since we launched the tool, over 630 lenders have created more than 160,000 income evaluations using a simpler way to calculate income for borrowers who are self-employed, have business owner- ship, or rental properties. We have other new innovations on the horizon, and we're constantly im- proving the tools and resources already in flight. We're not slowing down. We want to help lenders take advantage of all our solutions to support more home- buyers and grow their business while saving time and money in the process. Q: What about solutions that reduce costs for borrowers so they can actually reach the closing table? Evans: We're very focused on reduc- ing costs to help applicants become homebuyers. Fannie Mae's flagship HomeReady® mortgage program is a good example. It's specifically designed to support low-income and very-low- income borrowers by lowering down payment and closing cost requirements. HomeReady requires just a 3% down payment for creditworthy borrowers and also offers lower mortgage insur- ance costs. Borrowers don't need to be first- time homebuyers to take advantage of HomeReady. And we enhanced the product to include $2,500 towards reim- bursement of funds provided by lenders for down payments or closing costs for qualified, creditworthy very-low-income purchase borrowers. This enhancement is available to all Fannie Mae-approved lenders, making it a powerful tool to help increase homeownership oppor- tunities for borrowers at or below 50 percent AMI. We've also introduced several other cost-saving measures across the mort- gage origination spectrum. For instance, our suite of valuation modernization options has saved borrowers about $2.9 billion in appraisal costs since 2020, and our title modernization options have saved borrowers over $12 million. These savings can make a huge difference for homebuyers, especially in a challenging housing market. Fannie Mae is committed to pro- viding liquidity to ensure access to the affordable housing market, consistent with our Charter. We're listening to our lenders—they're on the front lines with borrowers, after all—and we're using their feedback to make the mortgage process easier, less expensive, and more accessible for everyone.