Chris Salese

As we laugh and stumble into the last few days of the year, it’s important to pause and take note of several recent technology upgrades from our friends at Fannie Mae.

I don’t know what our government and their housing industry associates have been drinking lately, but I sure hope they keep pouring their good cheer throughout 2017 as well.

If you haven’t heard yet from your lender, I’m referring to what’s called the “Day 1 Certainty” initiative that was launched and is now in full effect starting this month.

Per Fannie Mae, “we want our customers to have the confidence to lend, so that more qualified borrowers have access to affordable mortgage credit.”

Basically, their Day 1 Certainty initiative is broken down into three parts.

The first part is being able to offer automated income, asset and employment validation services.

The second part is providing freedom from representations and warranties on appraised values.

The third part is delivering property inspection waivers on refinance transactions.

Since you cannot get a loan directly from Fannie Mae, you must work with your lender who, in turn, has the established relationship with Fannie in order to be able to access their loan products and services.

For example, parts of the Day 1 Certainty program require your lender to opt-in and be willing to make adjustments in their file workflow to take advantage of these great new tools.

Unless there is some compelling reason not to participate, your lender will happily plug right in if they have not done so already.

If you are going through the pre-approval process with your lender to prepare for the purchase of a home, then these new automated validation services for your income, assets and employment could definitely help to reduce some of your required upfront paperwork.

Even better, it will provide greater confidence between Realtors and sellers if they know that your lender is using these services at a minimum on their pre-qualification letters and not just issuing letters based solely on a credit report review.

While speed is always desired by all parties, it’s the accuracy of information in your file that is critical.

The other two parts to Day 1 Certainty were designed to alleviate pressures surrounding appraisals. If you are thinking of refinancing your home, then you might be eligible for what’s called a PIW (property inspection waiver).

This is an automated offer through Fannie Mae to waive the appraisal of your home on certain qualified refinance transactions.

Whereas the freedom from representations and warranties, which are the set of assurances that your lender makes to Fannie regarding the quality of the loans that they send to them, effectively relieves your lender from Fannie’s enforcement of these assurances when the PIW is exercised.

Although we likely won’t see the full benefit of these upgrades until we get deeper into 2017 when there is more data to analyze in the system, for now, I think we should all offer a collective toast to Fannie Mae!

Chris Salese can be reached at chris@delsurmortgage.com or 707-363-4439.

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