Fannie, Freddie dual AUS transforms mortgage industry

Working to streamline the mortgage process

The new one-click dual AUS submissions for Fannie Mae and Freddie Mac loans is just over two months old, and it is already beginning to transform the mortgage industry.

Back in April, digital mortgage point-of-sale software provider Cloudvirga announced it launched single-click submission of loan data to both GSEs’ automated underwriting systems in collaboration with Freddie Mac.

Now, at the NEXT Women’s Mortgage Tech conference in Dallas, Cloudvirga and Freddie Mac were joined by Ellie Mae and two lenders to discuss the impact the new system is having on the mortgage industry in a panel called, “Why Not Both? Maximizing GSE AUS Outcomes.”

One of the greatest benefits expressed by the lenders was the ability to run an application through both systems and quickly identify property inspection waivers early on in the process.

The one-click dual AUS system doubles the chances for appraisal waivers, and Freddie Mac encourages lenders to run the dual system up front, Freddie Mac Technology Account Manager of the Single-Family Division Tina Khartami said on the panel.

“We want to have the process be as efficient as possible, and we want to strip out some of the costs,” said Erica Price, Cardinal Financial chief of mortgage operations.

The panelists explained that by identifying the best option for the borrower up front, the one-click dual AUS system shaves off not only time from the mortgage process, but also saves money by identifying the best product for the consumer as early as possible.

Price also pointed out that running an application through both AUS systems separately takes more time and money.

To give an idea of just how much time one-click dual AUS system saves, panelists said somewhere around 16% of homes qualify for property inspection waivers after being run through both systems. And these numbers could just continue to improve as many loans in 2017’s disaster areas did not qualify for the waiver.

HousingWire Content Solutions Editor Sarah Wheeler, who moderated the panel, asked the panelists: Why now?

The answer was simple. The technology is finally available for companies to be able to work toward streamlining the process. And of course – borrowers are now demanding it.

“We’re hearing more demand for automation and efficiency,” said Piper Beveridge, Ellie Mae vice president of strategic relations. “Origination costs are too high, it takes too long, borrowers are demanding a different experience.”

But despite the benefits the system brings to the mortgage market, panelists explained they are still struggling to educate both lenders and homebuyers of the benefits of using the streamlined process.

“Many lenders just comfortable with the system they know,” Beveridge said. “People are used to running both.”

And Mason-McDuffie Mortgage Executive Vice President of Operations Kevin Conlon explained that on the borrower front, many may not want to bypass the appraisal process since it won’t necessarily allow them to move into their home sooner.

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