Fannie Mae hopes to lower mortgage risk for lenders with new system

Fannie Mae announced a new program designed to make the mortgage application process easier and less risky for lenders.

Recently unveiled, the plan will require lenders to use trended credit data provided through Equifax and TransUnion rather than having the applicant provide their own information.

Currently, lenders can only view the outstanding balances of a potential borrower and if their payments have been on time or delinquent. The addition of new data will add monthly payment amounts to this information as well.

"Fannie Mae is helping to make the home mortgage market smarter, safer, and open to more consumers," said Craig Crabtree, general manager of Equifax Mortgage Services, in a release. "Increasing the use of trended data will help improve the evaluation of risk and reward the responsible use of credit, while incorporating Equifax verification services will help streamline the underwriting process."

Crabtree explained that the new data will allow lenders to have a more robust, two-year history of the applicants account management. This will benefits customers who don't have a sizable amount of credit, but pay their balances on time, making it easier to qualify for a mortgage.

TransUnion added to its counterpart's statements, and said that the number of those who qualify in the Super Prime risk tier—those with the greatest access to new loans at the lowest pricing—will increase from 12 percent of the population to 21 percent.

"[Lenders] can do things like approve more customers or give customers better rates," said Steve Chaouki, head of TransUnion's financial services group.

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