Lenders can speed up loan approvals by days and protect themselves from representations and warranties claims by partnering with Truework to verify borrower income and employment using Fannie Mae’s Desktop Underwriter validation service.
That’s according to San Francisco-based Truework, one of a handful of vendors that’s a Fannie Mae-authorized income and employment validation report supplier.
“Receiving approval as an authorized report supplier for Fannie Mae’s DU validation service solidifies our commitment to better serve the mortgage industry and help consumers across the country close home loans faster,” Truework cofounder and CEO Ryan Sandler said in a statement.
Fannie Mae says its DU validation service can “transform your company’s workflow,” by using third-party vendor data to validate income, asset and employment information entered by the lender in DU.
The validation service provides borrowers with a streamlined experience — eliminating the need for an IRS Form 4506-T, for example. In addition, Fannie Mae grants lenders “Day 1 Certainty” they won’t face representations and warranties claims over the accuracy of borrower income, asset, or employment status.
“Day 1 Certainty is incredibly important to customers and we’re excited to see the impact this new offering will have on lenders and borrowers alike,” Sandler said.
Other vendors currently authorized by Fannie Mae as income and employment validation report suppliers are Blend, Equifax Mortgage Solutions, and Finicity.
Blend, which today announced the launch of instant income verification for mortgages, is an authorized report supplier for both Fannie Mae’s DU validation service and Freddie Mac’s asset and income modeler (AIM).
Truework claims to be the first Fannie Mae authorized report supplier to verify income and employment data from third-party providers, and one of the first to offer automated income and employment verification reports.
Truework’s “instant verification network” connects to payroll providers including Gusto, Zenefits, Paylocity, UKG, and BambooHR, enabling it to verify the income and employment data of more than 35 million U.S. employees.
That means Truework’s partnership with Fannie Mae effectively “expands the pool of borrowers whose records may now be eligible for Day 1 Certainty when mortgage lenders use Truework to process employment and income verifications,” the company said.
“By adding more options to automate the verification of income and employment through the Desktop Underwriter validation service, we’re enabling a faster, more efficient loan origination process that creates a better experience for borrowers,” said Chuck Walker, vice president digital alliances and distribution, in a statement.
Truework claims lenders can also cut loan cycle time by up to 12 days from application to close, based on the typical 40- to 45-day process for many lenders who aren’t using the DU validation service.
Truework, which announced an integration with ICE Mortgage Technology’s Encompass loan origination platform in June, employs a “waterfall approach” to obtain income and employment data.
If Truework can’t verify a borrower’s income and employment through its instant network, the company’s Credentials process can retrieve information for gig workers and other 1099 employees who share employment and income information directly from their payroll provider. If neither of those approaches work, Truework employs an outreach team that processes manual verifications.
Editor’s note: This story has been updated to note Blend’s launch of instant income verification for mortgages.