rep-warrant-slideshow-cover-adobe.jpg
To ease buyback concerns and open up the credit box, Fannie Mae and Freddie Mac have begun offering upfront representation and warranty waivers when lenders run automated validations on crucial pieces of loan data.

As time-sensitive purchase mortgages gain market share — and repurchases have waned — these tools provide the added benefit of making originations more efficient. Plus, differences in approach have created new competition between the GSEs.

From vendor choice to valuations, here's a look at the key differences between Fannie and Freddie's upfront rep and warrant relief strategies.
2-speedometer.jpg

Speed to market

Fannie launched its rep and warrant relief on income, assets and collateral data in late 2016. For now, Freddie only offers collateral rep and warrant relief. It plans to offer waivers on income and asset data during the third quarter of this year.
3-confirm.jpg
Employment form confirm
alexskopje - stock.adobe.com

Employment verification

Fannie offers rep and warrant relief on verified employment data. Freddie is "not doing automated employment verification currently," said Lisa Tibbitts, a Freddie Mac spokeswoman.
5-property.jpg
krung99 - stock.adobe.com

Appraisal alternatives

Along with rep and warrant relief, Fannie and Freddie have been offering appraisal alternatives for data-validated property values.

Fannie's appraisal alternative is available for refinance loans. Freddie has rolled out an appraisal alternative for refi loans, and is working with its regulator to roll out an alternative for purchases.
4-vendor.jpg
designer491 - stock.adobe.com

Vendor management

Fannie Mae introduced its rep and warrant relief with a single vendor, Equifax, verifying income and employment data, and one other vendor, FormFree Holdings, verifying borrowers' assets.

Freddie is "working actively with multiple vendors" on its income and asset offerings, according to Andy Higginbotham, Freddie's senior vice president of single-family strategic delivery.
6-brand.jpg
brand word in vintage letterpress wood type in a drawer of antique apothecary cabinet
Marek Uliasz/Marek - stock.adobe.com

What's in a name?

Fannie Mae has separate "Day 1 Certainty" branding for its rep and warrant relief, whereas Freddie Mac has positioned rep and warrant relief as part of its "Loan Advisor" technology suite.
MORE FROM NATIONAL MORTGAGE NEWS