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A Better Mousetrap? Ten Crucial Points about Mortgage Trended Data

by Susan McCullah

Mar 7, 2016 1:00:00 PM

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coming_soon.jpgBeing able to predict whether or not a consumer will pay his or her mortgage loan on time and in full is the concept behind credit scoring. The Fannie Mae announcement about trended data being added to mortgage credit reports for the underwriting process is causing a shift in the entire industry.

This is a BIG deal, and is going to cause a shake up in the mortgage lending world for sure. Before you climb under your desk and yell "I can't take anymore after the TRID changes!" read on for ten crucial points to understand about the addition of mortgage trended data, and how you can be prepared for the change. 


#1: First off, you need to know the...Definition of trended data:

An enhanced credit report with new, valuable data fields, including Actual Payment Amount, and up to 30 months of detailed account history for each tradeline.

#2: Fannie Mae announcement about trended data. 

This data allows a smarter, more thorough analysis of the borrower’s credit history. Currently, credit reports used in mortgage lending only indicate the outstanding balance and if a borrower has been on time or delinquent on existing credit accounts. With trended credit data, lenders will have access to the monthly payment amounts that a consumer has made on these accounts over time.  Among other benefits, this will allow lenders to determine if the borrower tends to pay off revolving credit lines such as credit cards each month, or if the borrower tends to carry a balance from month-to-month while making minimum or other payments.  Desktop Underwriter will be updated to utilize this trended credit data, and Fannie Mae will provide additional guidance to lenders in the coming months.

#3: Only 2 of the 3 bureaus are currently on board. 

TransUnion and Equifax are the only repositories set up at this time to supply mortgage trended data in the beginning of the rollout. Experian could possibly offer it at a future date.

#4: Trended data CANNOT be used in lending decisions during the test phase. 

Although a hyperlink connecting to trended data will be accessible from the mortgage credit reports the first part of March, 2016, this is a test timeframe. In the March-June period, lenders are prohibited from using trended data in mortgage lending decisions. 

#5: The way you order credit reports won't change. 

Good news! Ordering mortgage credit reports will be conducted as always, either through the online ordering platform, through your DU system, or your LOS. 

#6: The guideline for how exactly trended data affects underwriting has not been announced yet. 

As of now, Fannie Mae hasn't shared specifically how mortgage trended data will be scored or impact the underwriting process. Trended credit data will be included as part of the Fannie Mae loan review with the DU 10.0 release in June 2016. The FICO credit scoring model currently does not incorporate trended data into their scoring system. 

#7: Not all tradelines will show trended data. 

The new trended credit data information will not show on certain account types. Authorized user accounts, public records, and accounts with less than six months of credit history are examples of accounts that will not show trended data. 

#8: Mortgage credit reports will change only slightly in their layout. 

Within the credit report, there will be a link to the trended data information, so, YAY! the credit report will basically look like the traditional ones you are accustomed to reviewing. 

#9: This change is coming in June, 2016.

Fannie Mae has announced the change will go into effect the weekend of June 25. However, this could change, so it's important to follow all the updates from Fannie and the bureaus. 

#10: These changes will most likely impact mortgage credit report costs. 

Both bureaus have announced price increases in regards to this more fleshed out, robust report. man_smiling.jpgWhile the exact amount is unknown at this time, stay tuned for more information on how your costs will be affected. 

 The Fannie Mae announcement about trended data has shaken up the industry, and will change the way consumers are analyzed in lending decisions. By staying on top of breaking information, you can be ready for this shift without hindering your productivity or progress.

Follow this blog and monitor your email for future updates from Data Facts on trended data information and timelines.  

Topics: Mortgage, Credit Score, FICO, mortgage trended data, trended credit data

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