Credit reports now automatically detect and interpret Fannie Mae loan conditions

February 11, 2008

SAN DIEGO -- Cogent Road, a provider of Internet-based applications for the mortgage industry, announced today that its Funding Suite® credit management software now includes a free Underwriting Conditions Scan that automatically detects underwriting conditions and translates those into easily interpreted language.

An agreement by President Bush and congressional leaders may result in a new economic stimulus plan that raises Fannie Mae and Freddie Mac loan limits from $417,000 to as high as $730,000. As a result, many brokers will reissue a higher percentage of loans through these automated underwriting systems in 2008. For many originators, this may be their first experience with the various underwriting conditions presented by Fannie Mae’s Desktop Underwriter® or Freddie Mac’s Loan Prospector.

Currently compatible with Fannie Mae, Funding Suite’s UC Scan automatically detects underwriting conditions the loan file will generate when processed through Desktop Underwriter®. Each condition is translated into easy to understand language which helps loan officers better understand the issues delaying their loans. Additionally, the tradeline data in question is listed along with the condition to more easily determine the steps necessary to have the issue resolved. Without UC Scan, the only way conditions can be determined is to create and run a new Desktop Underwriting session, which can cost more than $15. Consequently, the UC Scan can be a time and cost saving tool as it proactively provides the conditions and can eliminate unsuccessful Fannie Mae Desktop Underwriting sessions.

Both Fannie Mae and Freddie Mac use detailed analysis of the tradeline data within the tri-merge credit report to derive lending decisions. In addition to the credit score, these systems also analyze items such as payment history, seasoning, number of derogatories, account status and more to price their loans. While decisions are instantaneous, the automated systems can generate confusing “underwriting conditions” with only vague references to the data that caused them. In fact, a paper tri-merge credit report often does not even list the data referenced by Fannie Mae. Not only can this leave many loan officers in prequalifying limbo, but these situations can be difficult to explain to borrowers.

Funding Suite’s UC Scan not only educates the broker as to what conditions exist and what they are – it also helps resolve them more effectively and get the loan moved through the Fannie Mae system more efficiently.

Included as a separate tab within the Intelligent Credit Report, all results are listed in easy to understand language to help mortgage originators more easily resolve conditions before the file is even processed through Fannie Mae. Currently, the UC Scan works with Fannie’s Desktop Underwriter. Funding Suite plans to include Freddie Mac UC Scans by the middle of 2008.

 “Last month, President Bush unveiled a new economic stimulus plan that will likely raise Fannie Mae and Freddie Mac loan limits from $417,000 to as high as $730,000,” said Alan Baia, president of Cogent Road. “Many loan officers will now have an opportunity to reissue a higher percentage of loans through these underwriting systems and may be unfamiliar with the various underwriting conditions they present. Our UC Scan educates loan officers on the conditions generated through Desktop Underwriter, which enables them to move loans more efficiently through the pipeline.”