SEATTLE NEWS ARCHIVES & FEATURES
Huge mortgage player will no longer require pay stubs
Oct 21, 2015, 9:57 AM | Updated: Mar 4, 2016, 5:46 am
Fannie Mae, the mortgage finance company, will no longer require lenders to rely on collecting physical copies of pay stubs and tax data, elements traditionally has been required for a mortgage.
The change, which will take place in mid-2016, also will allow lenders to use employment and income information from a database operated by credit bureau Equifax to verify borrowers’ creditworthiness.
Fannie also announced changes that could ease mortgage credit. However, borrowers who have a traditional score from Fair Isaac (FICO) will still need to meet the 620 minimum. FICO scores range from 300 to 850.
Also in mid-2016, Fannie said it would mandate lenders to start collecting “trended” credit data from Equifax and TransUnion, which includes longer-term borrower credit histories.
The extra information will help Fannie see if borrowers are paying off their credit card bill every month or just making the minimum payment or if they’re letting balances rise. Borrowers who are making the full payment could see faster approvals and better interest rates.
