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May 6, 2020

Fannie Mae temporarily drops employment rep and warrant relief (National Mortgage News)

Fannie Mae has temporarily suspended representation and warrant relief for verification of employment previously performed through its DU validation service…

…A truer picture of a borrower’s circumstances, even in normal times, might come from looking at their assets, including bank statements and pay stubs, argues Brent Chandler, CEO at FormFree, an authorized report provider for asset verification for the DU validation service…

…”So as it stands today, our bank statement and our pay stub collection is an acceptable form of employment verification, but it was not given rep and warrant relief,” he said. That led lenders to continue to do VOE through one of the approved vendors to get rep and warrant relief.

Chandler argued that Fannie Mae’s decision to end VOE rep and warrant relief makes “everybody equal. So now, arguably you can pull a bank statement, get the assets, see the employer and qualify that loan on equal footing to any other system you would use.

“What’s going to come out of this is a diamond, what’s going to come out of this is a new way to calculate risk,” Chandler added. “Asset is going to change the way we understand consumer lending, period.”

This is an excerpt. Read the full story in National Mortgage News.