Fannie Mae’s Day 1 Certainty Wholesale Mae Day 1 Certainty Millennial State of Mind • Borrowers...

Fannie Mae’sDay 1 Certainty Wholesale

Revised 4/5/17

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Fannie Mae Day 1 Certainty

Disclaimer

Day 1 Certainty Overview

Fannie Mae Day 1 Certainty

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

Fannie Mae Day 1 Certainty

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

Fannie Mae Day 1 Certainty

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/Employment validation is completed through The Work Number, Asset validation is completed through AccountChek and all seamlessly interface with DU

Employment

Income

Assets

Fannie Mae Day 1 Certainty

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 The Work Number

4506T Transcript

Service

Base Pay √

Bonus √

Overtime √

Commission < 25% √

Commission 25%+ √ √

Social Security √

Retirement (Pension, Annuity)

√

*Self-employed income √

*Sole Proprietorship and Schedule C borrowers

AUS Integrations

Fannie Mae Day 1 Certainty

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 4506T Transcript Service

Base Pay

Bonus

Overtime

Commission < 25%

Commission 25%+ √

Social Security √

Retirement (Pension, Annuity)

√

*Self-employed income √

*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

Fannie Mae Day 1 Certainty

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

Fannie Mae Day 1 Certainty

Asset Type AccountChek

Checking, Savings √

CD √

Money Market √

Mutual Funds √

Retirement Accounts √

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

Fannie Mae Day 1 Certainty

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

Fannie Mae Day 1 Certainty

Day 1 Certainty Recap

Fannie Mae Day 1 Certainty

• 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 per-

income type basis• Assets are validated on a loan-level basis.• Employment is validated on a per-borrower and per-

employer basis

• Ability to take advantage of processing and underwriting efficiencies for components that have been validated

Fannie Mae Day 1 Certainty

Day 1 Certainty

• https://www.fanniemae.com/singlefamily/day-1-certainty

• https://www.fanniemae.com/singlefamily/desktop-underwriter-validation-service

Questions?PRMGUniversity@prmg.net