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   ARTICLE   |   From Scotsman Guide Residential Edition   |   April 2008

Meeting Challenges with Tech Tools

Fannie Mae aims to ease loan process for brokers and borrowers

The toughest housing correction in memory is taking its toll on families, communities and the mortgage business. It has drained liquidity from financial institutions and sent economic ripples around the globe. The demise of exotic loans and loose underwriting is sending the mortgage industry back to tighter underwriting, more-rational pricing, and greater demand for traditional, fixed- and adjustable-rate products.

This all doesn’t mean an end to affordable lending. Solutions that balance prudent risk and sustainable homeownership are available, along with a secondary market for responsible loans.

To gain a competitive edge in the marketplace, brokers need rapid access to information that can close the deal. And technology solutions can help brokers match borrowers with the best products for their needs.

Using technology

Brokers can put technology to work to gain access to needed information with Fannie Mae’s Desktop Originator (D.O.). This allows brokers to submit loans to Fannie Mae’s Desktop Underwriter for loan recommendations. D.O. technology offers faster origination recommendations at point-of-sale, a uniform process for multiple loan officers and processors, and Fannie Mae support and training.

With D.O.’s “preliminary findings” feature, brokers can access preliminary underwriting findings before selecting a lender. This gives them more flexibility by gauging borrower qualifications and comparing product offerings before submitting the loan to a sponsoring lender. This feature also benefits lenders because they are more likely to get applications that they will fund.

The multiproduct option in D.O. provides recommendations for as many as five loan products in one submission. This allows brokers to compare underwriting recommendations for multiple products at once. The multiproduct feature also can help identify safer alternatives to exotic products, such as products that offer low downpayments, flexible terms and other affordable features, products for low- and moderate-income borrowers and communities, and products tailored to borrowers with good credit but who have less cash to close.

D.O. integrates with most loan-origination systems, with Fannie Mae training and support. With an increasing shift toward purchase-money production and continued turnover in the industry, these products and technology-process enhancements will be key to driving greater efficiency in the loan-origination process.

Educating homebuyers

Many homebuyers caught in the nonprime undertow say they didn’t understand their loan terms. There are many educational materials available online that brokers and others can use to explain mortgage terms and products.

For instance, Fannie Mae offers fact sheets in English and Spanish on various topics, such as what borrowers need to know about their mortgage, escrow accounts, mortgage insurance and foreclosure avoidance. Brokers can customize the fact sheets with their company information.

Another Fannie Mae resource is Home Counselor Online, a free, Web-based tool that can help counselors and other housing professionals prepare borrowers for homeownership. When these consumers are ready, housing counselors want to put them into the hands of a mortgage lender and broker they know and trust. In addition, this tool provides the post-purchase support necessary to help homebuyers remain homeowners.

•  •  •

The challenge has never been greater to help buyers finance the home of their dreams with a loan they can afford today and tomorrow.

The key to success is to recognize opportunities and to adapt to change. Fannie Mae remains ready to help brokers with technology and mortgage products to meet their needs and those of their borrowers.


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