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MBA Annual marks the anniversary of Day 1 Certainty. Fannie Mae’s Andrew Bon Salle shares thoughts.

October 20, 2017 | By

An estimated 4,500 real estate finance professionals will head to Denver for the Mortgage Bankers Association (MBA) Annual Convention & Expo, Oct. 22-25. The event brings together the MBA and its members with government and the private sector.

Attendees will hear from industry leaders including the Honorable Benjamin S. Carson, M.D., Secretary of the U.S. Department of Housing and Urban Development (HUD); the Honorable Mel Watt, Director of the Federal Housing Finance Agency (FHFA); Timothy J. Mayopoulos, President and Chief Executive Officer of Fannie Mae; and Donald H. Layton, Chief Executive Officer of Freddie Mac; and other speakers.

There also will be educational break-out sessions, exhibits, and networking opportunities. (View schedule)

A Very Visible Platform

Fannie Mae announced Day 1 Certainty™ at last year’s event – and the crowd spontaneously applauded the move. “We come to this MBA Annual meeting focused on delivering a faster, simpler customer experience….Today, I’m really quite happy to announce that this goal of being a simpler, more certain customer experience is in fact a reality….Today, we’re delivering tangible solutions to meet the challenges of our customers,” Mayopoulos told attendees in 2016.

One year later, we asked Andrew Bon Salle, Fannie Mae’s Executive Vice President – Single-Family Business, what to expect from Fannie Mae this year. While he wouldn’t share any spoilers, he did bring us up to speed on Day 1 Certainty’s first year and what customers are saying.

(For a fuller look at Fannie Mae’s participation at MBA Annual, visit our website. Join the conversation on Twitter using hashtag #MBAAnnual17. And stay tuned for more MBA coverage in The Home Story following the conference.)

Q: Is Day 1 Certainty making inroads with customers?

ABS: It sure is. More than 1,000 lenders have signed up for one or more of our Day 1 Certainty services. These lenders account for three-quarters of our deliveries through Desktop Underwriter®, or DU®. And so far, lenders have delivered more than $300 billion in loans with one or more Day 1 Certainty features.

Some have shared that Day 1 Certainty has cut the time from loan application to final approval from 50 days to 25. A lender reported reduced capital reserves on Fannie Mae loans by 25 percent, as less rep and warrant risk ties up less capital. These are real and tangible benefits. We like hearing stories like these, but we’ll also be listening closely to our customers during MBA’s annual meeting to learn how we can improve.

Q: How is success measured by Fannie Mae?

ABS: First, we are seeing a 14 percent average reduction in the time from application to close when assets are validated through Desktop Underwriter. Second, we are seeing an average reduction in application to close time of more than 17 percent for loans with employment and/or income validated. Third, we’re seeing an average reduction in cycle time of more than 38 percent for loans with exercised property inspection waivers. Finally, we know value rep and warrant is being offered on about 62 percent of applications. Our vision is to enable a completely digitized mortgage process from end to end.

Q: Can you quantify the value of that all-digital mortgage process?

ABS: We know that Day 1 Certainty is removing as many as 20 days from the mortgage process, resulting in real benefit to consumers and lenders. But what does that mean? According to the Mortgage Bankers Association Q1 2017 Performance Report, fully-loaded loan production expenses approached $8,900 per loan. With an average loan application to closing cycle time of 54.9 days, that equals a total expense of $162 per day per loan.

Leveraging data validation to shorten the mortgage process by 20 days could result in a reduction of $3,240 in fixed origination and process costs. This represents a 36.5 percent processing cost reduction.

Q: You’ve called Day 1 Certainty “a foundation.” What do you mean by that?

ABS: Day 1 Certainty is the foundation for automation and a digital process – requiring less paper. Making the mortgage process more streamlined, automated, faster, and easier. Our customers have shared universal goals to improve their borrower experience, increase certainty, lower costs, and increase operational efficiency across all channels. We have given lenders the tools they need to meet these goals. And today, we are building on certainty – making Day 1 Certainty even better to make the mortgage experience faster, safer, and less expensive. We know things are changing rapidly for lenders, consumers, and servicers of mortgage credit.

We are on a journey to help our customers create a superior borrower experience, to drive operational efficiency resulting in reduced origination cycle times, and provide certainty to our customers and the industry. By delivering certainty, we look to provide confidence in business outcomes, confidence in results, and confidence in a business partner you can trust. This is the direction the industry is headed, and we want our customers to be right there on the forefront.

Q: What’s next for Fannie Mae?

ABS: We’ll be finishing the year strong with the launch of new tools and capabilities that I can’t share publicly yet – but we’ll be making some announcements and providing customers with previews and demos at MBA.

This is just the beginning. To build on our message of certainty, we are committed to delivering simple, sure, cutting-edge tools and services that will move our industry forward.

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