Fannie Mae and Equifax have announced that Fannie will be incorporating credit trending information, provided by Equifax, into Desktop Underwriter. In addition, lenders will be able to verify an applicant’s income and employment through DU using either Equifax’s “The Work Number” product or through a manual verification service offered by Equifax (Verifications).
Both Fannie Mae and Equifax tout this as a huge benefit to consumers and lenders. The belief is the use of credit trending, coupled with the existing process of using the credit score and reported debt information, will provide more complete information to assist lenders to qualify more consumers for mortgages. With Equifax verifying the employment and income, there is no need for most borrowers to provide their W-2s and pay stubs. A win-win for everyone.
So, what’s new about this Equifax trending analysis data? Wasn’t that how credit used to be reported and loans underwritten? Does this analysis include information from the other two repositories? Will this ultimately replace the need for a lender to pull credit and verify the applicant’s income and employment? Some things to think about. This could surely streamline the process and reduce costs. Sounds pretty good, eh?
Would lenders still be required to pull new credit and go directly to an employer to reverify information? How about the continuing use of the 4506T for tax transcripts? Why pull transcripts if Equifax already did the work to verify income? However, if need be, I’d bet that Equifax could also obtain the transcripts. This could further reduce a lenders time and expense. Sounding better all the time.
With these services, plus integration with systems available for asset verifications, and their property valuation data base, Fannie, and Freddie for that matter, can provide a complete online loan approval, with loan pricing. In essence, a one-stop loan approval, minimizing, if not eliminating, the need to gather supporting documentation from consumers. All that’s needed is the loan’s closing and delivery, with someone to service. Wow, talk about reducing costs!
Then, again, will they still need the lender?