Unlocking the Power of Bank Transaction Data

Unlocking the Power of Bank Transaction Data

How to validate income and employment with Fannie Mae's Desktop Underwriter using AccountChek's asset report

In today's mortgage market, lenders face many challenges, including balancing the need for quick verification of borrower eligibility against expense management concerns.  

To address these challenges, Fannie Mae announced that lenders using Desktop Underwriter® (DU®) validation service can now use the AccountChek Verification of Asset report to validate income and employment. This change is an incredibly positive development for lenders and consumers alike, as using direct deposit banking data to evaluate income and employment will help lenders streamline processes and improve the borrower experience.

How it works:
  1. Authorization and Data Access:

    The first step in leveraging bank transaction data is obtaining authorization from the borrower. AccountChek has made this process seamless thanks to its wide-ranging integrations.  This allows borrowers to securely grant access to their financial information – including transaction history, account balances, and income deposits – with just a few clicks. This level of digital connectivity ensures both convenience and data security throughout the verification process.  

  2. Data Retrieval: 

    Once borrowers have authorized access to their financial information via AccountChek, the system retrieves the relevant information – including income deposits, expenses and account balances.  
  3. Report Generation:
    Once the data is retrieved, AccountChek generates a comprehensive report summarizing the bank data, which is shared with lender’s point-of-sale (POS) platform and/or loan origination system (LOS) and in the AccountChek web-based dashboard. This report contains the appropriate amount of data needed to underwrite the loan. AccountChek reports can be configured to include 1, 2, or 3 months of account history, with 2 months being the standard for Fannie Mae purchase loans. 

  4. Data Integration with DU®:  

    AccountChek has a direct integration that allows 24+ months of banking data to flow into DU as part of a DU loan submission. Lenders do not need to change the months of account history in the Verification of Assets (VOA) report ordered to take advantage of this program. Regardless of the lender's configured account history requested (typically 2 months), Informative Research retrieves and sends the full set of bank data to DU. 

  5. Income Validation:

    Bank transaction data serves as a rich source of income and employment data, allowing DU to assess the stability and reliability of the borrower's income stream. By analyzing income deposits over time, DU can confirm the consistency of income, identify sources of income, and detect any irregularities that may warrant further investigation. When employment and income are validated, they will be presented in the DU findings. 

    In addition, lenders may increase the number of borrowers that receive an Approve/Eligible recommendation in DU by assessing eligibility through rent payment identification and a cash flow assessment. DU will consider positive rent payment history for certain first-time homebuyers and assess a borrower's cash flow for certain loan case files based on borrower eligibility. Visit fanniemae.com/singlesource to learn more.

The Benefits 

By using AccountChek data in DU validation service to receive asset, income, and employment verification, lenders may be able to:   

  • Improve operational efficiency at point-of-sale, underwriting, and processing to get "clear to close" faster.  
  • Lower costs by reducing third-party report expenses and staff time**   
  • Achieve Day 1 Certainty® through relief from representation and warranties when income, employment, and/or asset information is validated, which may increase loan quality and reduce repurchase risk. 
  • Streamline large deposit verification by reducing documentation requirements while mitigating risk.  
  • Enhance the borrower's experience by reducing the documents borrowers must provide, which could increase the chance that they will close.  
  • Increase the number of borrowers that receive an Approve/Eligible recommendation in DU by assessing eligibility through rent payment identification and a cash flow assessment.  

**In a survey of pilot lenders, 50% saw some level of cost savings over their existing third-party report costs. Customer results may vary. 

Getting Started: 

For lenders eager to take advantage of the benefits of this program, a straightforward and user-friendly registration is required. Fannie Mae has established clear guidelines and resources to facilitate onboarding of lenders into the program. 

To get started, visit Fannie Mae's website and submit the request form to begin the activation process.