Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Fannie Mae uses Blend rent payment data in credit access expansion push

Stock MarketsJan 11, 2022 09:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Fannie Mae headquarters is seen in Washington, DC, U.S. on February 21, 2014. REUTERS/Kevin Lamarque 2/2

By Hannah Lang

(Reuters) - U.S. housing finance giant Fannie Mae has started integrating data from digital banking startup Blend Labs Inc. into its underwriting program to make it easier for lenders to evaluate a borrower's rental payment history when approving a home loan.

Fannie's effort to include rental payment history in the loan approval process comes as President Joe Biden's administration pushes to improve access to credit and address inequities in the housing system.

Alternative sources of data, like rental payments, can help lenders more accurately assess the creditworthiness of borrowers with limited credit history, say credit experts.

Fannie Mae, along with Freddie Mac (OTC:FMCC), guarantees more than half the nation's mortgages and must approve the loans it insures, along with the lenders that originate them.

“We think it's going to allow more first-time home-buyers or aspiring first time home-buyers to responsibly qualify, including those that who have a more limited credit history,” said Steve Holden, Fannie's vice president of single-family data and analytics.

Approximately 20% of the U.S. population has little established credit history – a group in which Black and Hispanic consumers are disproportionately represented, according to Fannie.

San Francisco-based Blend gathers third-party data which it shares with lenders to help them quickly verify requirements like a borrower's source of income.

The company powers the mortgage application process for several major lenders, including Wells Fargo (NYSE:WFC) & Co, U.S. Bancorp and Mr. Cooper Group Inc, processing around $5 billion of loans daily on average, it says.

Many lenders were eager to participate in the new program, but were wary of asking borrowers for bank statements showing that they made timely rental payments, and of the added burden of having to manually review those statements, said Nima Ghamsari, Blend co-founder and chief executive officer.

“There's only a few times a year where the CEOs of some of these mortgage companies will call me and say, ‘Hey, how come you guys don't have this thing yet?’” he said. “This was one of those occasions I got a lot of phone calls.”

After Fannie said in August that it would consider rental payment history, Blend integrated the bank rental payment transaction data into its platform and Fannie in turn integrated the new Blend feature into its underwriting system.

Lenders using Blend can have the fintech send the payment data directly to Fannie, instead of gathering it themselves which would be costly.

The housing finance giant is exploring other ways to unlock access to credit for under-served borrowers, Holden said, without elaborating.

Fannie Mae uses Blend rent payment data in credit access expansion push
 

Related Articles

Telecoms group Telia delivers upbeat growth forecast
Telecoms group Telia delivers upbeat growth forecast By Reuters - Jan 28, 2022

By Supantha Mukherjee STOCKHOLM (Reuters) -Nordic telecoms operator Telia gave an upbeat growth forecast on Friday as it reported better than expected quarterly core earnings,...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email