Sarma » Sarma is Getting Ready for Trended Data

Sarma is Getting Ready for Trended Data

Sarma is Getting Ready for Trended Data


Fannie Mae will begin incorporating trended credit data into its automated underwriting platform system. This requirement comes into effect with the new updated Desktop Underwriter (DU) 10.0 on June 25th 2016. Fannie Mae seeks to strengthen the mortgage market for both lenders and consumers by providing a better way to assess risks in mortgage loans. Currently, credit reports used in mortgage lending indicate the outstanding balance on existing credit accounts such as credit cards, mortgages or student loans.  With trended credit data, lenders will have access to the following information for the past 24 months:

  • the monthly payment amounts that a consumer has made on these accounts
  • the actual payment received, and
  • the balance on the account

This additional data brings to light how consumers pay revolving balances every month. Are they making their monthly payment? Are they transferring balances between credit cards? Are they someone who pays the minimum amount and has a high balance? The ability to have the answers to these questions with Trended Data will put more power in the hands of lenders so they have better performing loans- resulting in reduced costs to service those loans and provide more creditworthy borrowers access to mortgage credit. Analyzing the data creates the opportunity to extract meaningful statistics and help predict future- past behavior is a good predictor of future behavior. Payment delinquencies are a significant factor in credit scores. When trended data is considered you can gain a deeper understanding of specific consumer behavior history. For example, paying credit card balances in full or in large part for a few months, borrowers can demonstrate that a late payment was not deeply reflective of their general debt repayment ability and behavior. Get to know whom you are lending to by taking advantage of trended credit data on your reports.

All three credit bureaus will provide this advancement in mortgage underwriting and to enclose this comprehensive look into a consumers account history trended data has the potential to increase the credit report. Currently, Trended Data is supported by TransUnion and Equifax, Experian is expected to roll out Trended Data early 2017. Trended Data will bring higher costs imposed by TransUnion and Equifax. We will communicate the details on this as soon as they are finalized. Fannie Mae is committed to continuous improvement of the DU risk assessment model- this evaluation is fair and objective, applying the same criteria to every mortgage loan application it considers.

Tradeline information over Trended Data.

 Transunion on Trended Data

Equifax on Trended Data

Experian on Trended Data

These are the updates you can expect with Desktop Underwriter 10.0

Updated DU Risk Assessment

 Underwriteing Borrowers without Traditional Credit

 Policy Changes for Borrowers with Multiple Financed Properties

 Home Ready TM Mortgage Message Updates

 Updates to Align with the Selling Guide

 Retirement of DU Version 9.2

   DU 10.0 Overview

A recent update from Fannie Mae:

During the testing phase of trended data, there has been issues with the enhancements and decided to delay the release of DU Version 10.0 that was scheduled to release June 25 2016, in order to support a successful implementation.

Please visit our FAQ page for more answers.  FAQ with a Sample Report

 

  More on Trended Data at Fannie Mae


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We will continue to relay updates over trended data. If you have any questions, please email asktrendeddata@sarma.com.