Rey Maninang is senior vice president and national sales
director for the wholesale lending division of Carrington
Mortgage Services LLC. He is responsible for overseeing the
company’s wholesale-production sales team, providing
strategic direction and managing funded volume, profitability,
revenue and recruitment to increase market share, operational and customer metrics, as well as driving customer-service initiatives for growth and retention. Reach Maninang
Although refinance business has declined in general over the past year, it still repre- sents a significant portion of the mort- gage origination market, particularly
during the purchase market’s “off season” — the
winter. In May 2017, refinances were just 32 percent
of all closed loans, according to data from Ellie Mae.
From October 2016 to January 2017, however, refinances represented almost half of all loans, fluctuating between 46 percent and 47 percent of the market.
Although purchase business remains a priority for
many mortgage professionals, there are still opportunities to be had in refinances.
Speed is critical when it comes to this market, however. Mortgage originators who want to make the
most of their refinance prospects should take a closer
look at a new program from Fannie Mae that aims to
streamline the mortgage process and may be particularly helpful to originators working to keep their
refinance business robust.
In October 2016, Fannie Mae announced Day 1 Certainty, a mortgage initiative designed to help lenders
reduce risk and bring speed and simplicity to the mortgage application process for originators. By December
2016, the various components of the initiative were all
Using Fannie Mae’s underwriting system, Desk-
top Underwriter (DU), lenders and originators can
access income, assets and employment-validation
services — and, in theory, get certainty on whether
a loan will close on day one. Fannie Mae also is pro-
viding freedom from representations and warranties
on appraised values with the use of its other system,
Collateral Underwriter (CU).
Fannie Mae claims that by using these systems and
promoting further digitization of data, lenders and
originators will be able to move forward more quickly
and with greater assurance in the quality of their loans,
promoting stronger risk management and simplicity
in the mortgage process.
Although Fannie Mae has previously allowed lenders to utilize third-party reports to validate items like
income, employment and assets, in those situations,
the lender remained accountable for the reliability of
that data. With use of DU, lenders are relieved of the
burden of certain representations and warranties once
data has been validated.
The DU validation service can work with both correspondent and third-party-originator business models,
and the enforcement relief from representations and
warranties transfers from the correspondent lender to
any purchasing lender. Mortgage originators should
note, however, that the DU validation service provided
via the Day 1 Certainty program is only available for
conventional loans. Nonconforming loans and government loan products from the Federal Housing Administration, U. S. Department of Veterans Affairs and the U.S.
Department of Agriculture are not eligible.
The Day 1 Certainty program has the potential to be
a boon to originators and lenders alike, for purchase
and refinance loans. If it works as promised, it will
simplify loan originations by automating previously
manual processes with more accurate digital ones,
also reducing risk and complexity.
One of the greatest potential benefits of the Day 1
Certainty program for originators and borrowers is
reduced closing times. Although the days-to-close
time frame on conventional loans was as high as 51
this past January, according to Ellie Mae, it was down
to just 41 days this past May, and conventional refinances were down to 40 days.
According to Fannie Mae, early adopters of the DU
service found that turn times for loans were reduced
by four to seven days on average, which could be
Streamline Your Refi Business
Day 1 Certainty can keep pipelines full and moving swiftly
By Rey Maninang
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