Why Haven’t Loan Officers Been Told These Facts?

FNMA Report Underscores the Importance of Leveraging Digital Technology

Not Your Father’s Loan Manufacture – Get Onboard or Get Left Behind

Over the last few years, several mortgage origination technology solutions have been rolled out to increase efficiency, improve the borrower experience, and lower costs. One of these advancements, digital verification, allows borrowers to permit lenders or third-party service providers to digitally access their financial information, such as bank accounts and payroll data, to verify employment, income, and assets. With this method, potential homebuyers do not need to assemble and deliver those records to their lender.

Efficiency and convenience are only one aspect of mortgage technology innovations. There is a growing dependence on technology to get deals done. A lender’s ability to close a loan may often hinge on their fintech knowledge and capabilities—case in point: the positive rent rating in FNMA and FHLMC AU. If there is no electronic asset verification report, there is no AU consideration of positive rent history. The result of an unnecessary thin-file or marginal credit AU submission could be findings of refer or worse. However, for the time being, FHA does not require the asset verification report to consider a positive rent history. The LOSJ will tackle contemporary AUS analysis of positive rent history in October.

Today’s Digital Natives Want A Digital Approach to Loan Manufacture

Earlier this year, FNMA surveyed homebuyers who purchased a home with a mortgage acquired by Fannie Mae between January 2023 and November 2023. The survey intends to establish buyer preferences and better understand adoption rates and overall experiences with digital technology.

FNMA conducted the same survey three years ago. In comparing the August 2024 survey to the one from three years ago, FNMA sought to identify trends in consumers’ use of the technology, including how their preferences have changed. FNMA asserts that these insights can help the industry further evolve the mortgage origination process to benefit all stakeholders, including lenders, service providers, and consumers.

Excerpted From The Report, Summary of Key Findings:

  • Consistent with the exponential growth of technology use in our day-to-day lives, the use of personal-touch-only channels (i.e., in-person or by-phone) when obtaining a mortgage has significantly declined. Most recent homebuyers opted for a hybrid approach, leveraging both online channels and personal-touch channels.
  • Overall, recent homebuyers expressed immense interest in having a more or fully digital mortgage process.

  • Many recent homebuyers reported they were not offered the digital verification option to grant lenders’ access to their online bank accounts for lenders to verify funds for closing or down payment. Among those who were offered, most agreed to grant permission. For the very few who were offered but declined, data security was cited as their primary concern.
  • Slightly more than half of recent homebuyers who granted lenders or technology service providers (TSPs) access to their online bank accounts said they would use the digital verification technology again for their next mortgage. Of those who were not offered the digital verification method, only 15% said they would use the technology on their next mortgage, indicating that prior experience matters for technology adoption.

Most recent homebuyers opted for a hybrid approach (using both online and personal-touch channels) when obtaining their current mortgage. The usage of personal-touch-only channels (i.e., in-person or by phone) has declined significantly.

The borrower’s use of the hybrid approach has increased gradually since 2020. In contrast, the use of personal-touch-only channels declined significantly over the same period. While it remains small, the use of online-only channels increased from 2020 and remains steady compared to 2021.

August 2024 Survey of Recent Homebuyers on Digital Verification Technology

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BEHIND THE SCENES – VA LGY Announces New Training Portal (Almost Ready For Prime Time)

From The VA Announcement

Loan Guaranty Service is excited to announce the launch of our new LGY Training webpage, designed to better serve our stakeholders by providing comprehensive training resources and support for the VA Home Loan Program.

Key Features of the New LGY Training Page:

  • User-Friendly Design: Simplified navigation and improved accessibility to ensure a seamless user experience.
  • Dedicated Training Sections: Specific training modules tailored to different aspects of the VA Home Loan process, including post-closing and servicing matters.
  • Resource Integration: Easy access to training materials and resources directly from the main page.

To access this training webpage, visit Welcome to Loan Guaranty Service (LGY) Training – VA Home Loans.

An upcoming feature, expected to deploy soon to the training webpage will allow external users to request training on a topic and make that request through ServiceNow.

Thank you for your continued partnership and commitment to serving our Veterans.

Kind Regards,

Loan Guaranty Service

Training Portal Image Courtesy of VA LGY

 

 

Tip of the Week – Join The Loan Officer School for 2024 CE

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  • Discover the truth about non-HPA MI cancellation: It is not what you think it is.
  • Delivering appraisal copies three days before consummation may be too late under Regulation B.
  • § 1002.14(a)(2) Timing requirements for disclosing the applicant’s right to receive a copy of all written appraisals – You may have it wrong.

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