Fannie Mae announced on Wednesday the availability of a new web-based option for its income calculator tool, which is designed to “help mortgage professionals serve the growing number of mortgage applicants in the U.S. who are self-employed and don’t have traditional sources of income,” according to the government-sponsored enterprise (GSE).
The new option for the tool is available at no additional cost and can be accessed via the company’s website.
“Whether through our new web-based user interface or through an integrated technology service provider, Fannie Mae’s Income Calculator simplifies the process of underwriting the qualifying income of self-employed borrowers, which traditionally has been a challenging and time-consuming operation for lenders,“ Mark Fisher, vice president of single-family credit risk solutions at Fannie Mae, said in a statement.
“With the launch of our new web interface, originators now can select the solution that best aligns with their processes and meets their needs, while saving time and improving certainty in the quality of the loan,“ he added.
The company introduced the income calculator last year, and the new web-based option is designed to reduce loan defects that are more likely for borrowers with nontraditional sources of income. The GSE introduced updates to its Selling Guide in February that are also designed to better serve those with nontraditional income.
“Lenders also still have the option to partner with one of Fannie Mae’s authorized third-party technology service providers to automate the calculation of self-employment income streams during the underwriting process,” Fannie Mae explained. “With either solution, the lender benefits from an accurate income calculation and the resulting reduced risk of loan repurchase.”
Self-employed borrowers make up about 10% of the U.S. workforce and “a growing number of Fannie Mae loan deliveries,” the GSE stated. “Incorrect income calculation and documentation can cause defects, which are identified in Fannie Mae’s post-purchase loan quality reviews. With the Fannie Mae Income Calculator, lenders receive an accurate, validated income amount for use in the underwriting process.”