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Solutions to help lenders comply with Fannie Mae’s new Loan Quality Initiative – Effective June 1, 2010
Due to incomplete or inaccurate SSN and ITINs, loan repurchases have been increasing over the last three years. To mitigate repurchase risk, Fannie Mae’s Loan Quality Initiative will be requiring lenders to take steps to verify the accuracy of the borrower’s SSN and ITIN.
In response to these new requirements, SettlementOne is providing lenders with a fully automated and simple-to-use solution available from their platform to help lenders remain in compliance.
Service Benefits:
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Reliability- Direct access to the Social Security Administration
Timeliness- Guaranteed verification within one hour
Accuracy- Auto-population of borrower information directly from our credit platform
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To learn more about our SSN verification solution and complying with the Loan Quality Initiative, contact SettlementOne.
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Fannie Mae’s Loan Quality Initiative directs lenders to actively evaluate any actions that may affect a borrower’s ability to repay a loan, including any undisclosed liabilities. Such liabilities may include new inquiries, new tradelines, late payments, or an increase in debt. If lenders find that additional credit was obtained through a refreshed credit report, a verification of that debt must be provided and the borrower must be re-qualified with the monthly payment.
To further mitigate repurchase risk, SettlementOne has developed CreditConx, a new solution that will allow lenders to seamlessly comply with Fannie Mae’s new changes without affecting your operational efficiency.
Service Benefits:
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Efficiency- With the touch of a button, SettlementOne produces an easy to read credit comparative analysis of the previously filed credit report and the newly run report
Detection- Quickly identify new or undisclosed liabilities such as new inquiries, late payments, increase in tradeline debt ratios, additional open trade lines, and more
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Fannie Mae requires lenders "to confirm that companies or individuals involved in the origination, underwriting, or servicing of the mortgage transaction are not on the General Services Administration (GSA) Excluded Party List or the HUD Limited Denial of Participation List ("LDP List") prior to the delivery of the loan" (Fannie Mae Announcement SEL-2010-01). If any party to the transaction is included on the GSA or LDP List, the loan will be ineligible for funding, or subject to repurchase.
In order to facilitate lender compliance with the LQI, SettlementOne offers its Exlcusionary Parties Report. This solution automatically verifies that those participants involved in the origination or servicing of a mortgage loan do not appear on the GSA or LDP exclusionary list.
The Exclusionary Parties Report offers the following solutions to lenders' compliance challenges:
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Real-time updates of GSA and LDP lists that provide the most recent data
Comprehensive search technology that eliminates hours spent manually reviewing various lists for multiple parties
Ability to import participant files in .csv format quickly and easily, minimizing false negatives and positives
Benefit from receiving a single easy to read report for all participants of a single loan
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Fannie Mae has cited a MERS search as an additional step in identifying fraud – specificially, potential undisclosed liabilities. MERS enables lenders to be aware of two red flag scenarios that are good indicators of fraud: 1) the borrower has obtained more than one mortgage secured by the same property, and 2) the borrower is on an undisclosed number of mortgage loans. Since the introduction of this Fannie Mae Initiative, lenders have been searching for a compliance solution after realizing the time and resource-intensiveness of the task.
SettlementOne has partnered with MERS to offer a MERS Report to its customers in a variety of ways. MERS Reports can be accessed as part of SettlementOne's CreditCompare Report, with each credit inquiry or as a standalone report.
Through its bundled services platform, lenders using SettlementOne can easily access the report generated by MERS tp search the borrower's name, social security number or the property address. The report will identify undisclosed liens and multiple loans per property or borrower in real time.
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To learn more about our Comparative Analysis Report solution and complying with the Loan Quality Initiative, contact SettlementOne.
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