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Fannie Mae’sDay 1 Certainty Wholesale
Revised 4/5/17
While every effort has been made to ensure the reliability of the webinar content, PRMG’s product profiles and their updates, are the official statements of PRMG and in the event of discrepancies between the information in this webinar and the product profiles, the product profiles will always supersede the information provided here.
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
