How to Manage Fannie Mae® Rep & Warrant for Self Employed Income

Overview

Income Analysis rapidly provides you access to Fannie Mae^® Rep and Warrant (R&W) results for self-employed borrower income. This enhanced loan framework streamlines the fulfillment process, reduces risk and enhances investor confidence through added protection against future repurchase demands.

When all data is submitted to Income Analysis, Self Employed income is automatically processed by Fannie Mae to confirm accuracy and eligibility for relief. The R&W status for your order is easy to identify as the results are indicated by the presence of a FNMA Surround.

Consider the following:

• Loan Officers and Underwriters can interact and submit self-employed income to Fannie Mae on the Income Calculation and LO View tabs.

• You are not required to accept the calculations presented by Fannie Mae. You have the option to manually update and underwrite loan file calculations with applicable supporting documentation.

• To bind approved calculations to the loan, simply enter the DU Casefile ID into Income Analysis. Until the DU Casefile ID is added, the calculations remain in “Preview Mode”, which is indicated by red text throughout the application and on the PDF report.

• The Income Calculator integrates with Desktop Underwriter (DU) to ensure one-year documentation relief is applied when eligible. To support this, make sure all start dates are entered and current. For a quick and easy way to review start dates, refer to the Task List for an easy State Date view.

• Fannie Mae gives you the ability to attest to Manual Options, resubmit the loan and still receive R&W relief. Be sure to review the list of potential Manual Options that may appear in the popup window.

Select the investor guideline

The Investor Guideline dropdown allows you to switch between investors and see alternative eligibility options. The Investor Guideline determines the set of investor rules that Income Analysis will use when calculating the income. When the initial order is submitted, the Investor Guideline will either have been chosen at that time or left blank. If the investor was left blank, then Income Analysis will use a conservative set of industry standard guidelines by default.

1. From the Investor Guideline dropdown menu, select FNMA (Fannie). A guideline option confirmation popup displays.

2. Depending on the scenario, selectable options may appear in the popup. If presented with options, make your selections.

3. Review the messaging, then click Save.

4. Observe the updated investor is reflected.

Identify the relief status

1. From the Income Calculation or LO View tabs, navigate to the Self Employed section.

2. Observe the FNMA Surround. The FNMA Surround appears to the right of each record. Each FNMA Surround is color coded, clickable and contains details about the Self Employed income as indicated by Fannie Mae.

   

• Green indicates that Fannie Mae has confirmed the income for relief. In this scenario the income figures are locked to prevent further edits. When the surround is green but the record displays Preview Mode, it means that the DU Casefile ID is missing.
  The ID should be added then resubmitted to Fannie Mae.

• Yellow indicates that only one year of tax data has been submitted to Fannie Mae, but two years of tax data are required to determine eligibility.

• Red indicates that the income submitted is ineligible and does not qualify for relief. This does not mean that the income can’t be considered as part of the qualifying income, however.

Warning: To secure R&W relief, it is essential that the analysis include the DU Casefile ID when submitted to Fannie Mae. Until the Casefile ID is added, the calculations remain in ‘Preview Mode’, indicated in red text.

Add the DU Casefile ID

1. From the Income Calculation or LO View tabs, navigate to the Self Employed section.

2. Click the FNMA surround.

3. Enter the DU Casefile ID.

4. Click Resend.

Note: You can also add the DU Casefile ID by navigating to the Task List, locating the Fannie DU Casefile ID task, entering the ID in the red box and clicking Resend to submit.

Unaccept the Fannie Mae values to make edits

You are not required to accept Fannie Mae’s Self Employed calculations. If you choose not to, you can manually update and underwrite the loan file. However, when Fannie Mae’s values are accepted, the Self Employed fields are locked from making edits. To make changes, you must first unaccept the values.

1. From the Income Calculation or LO View tabs, navigate to the Self Employed section.

2. Click the FNMA surround to access the investor popup.

3. In Fannie Mae Monthly Income Calculation section of the popup:

   1. Click Exit Preview, for loan files with a missing DU Casefile ID.

   2. Click Unaccept, for loan files with the DU Casefile ID already added.

4. Add your comments to the Comment box.

5. Click Save Changes. The popup will close.

6. To edit, return to the item you want to update and click into any field or select Edit (where applicable). This will open the Editing popup with all fields unlocked for editing.

7. Make your updates, add your Comment, then click Save Changes.  

8. Once the manual fields have been updated and saved, click Resend to Fannie Mae.

9. Confirm the selected information, then click Send.

10. Finally, if you’re an Encompass®-integrated user, click Update LOS to send the updated calculations to your Loan Origination System (LOS).

Note: You can revert to Fannie Mae’s original calculations at any time by clicking the FNMA Surround. Then, from the Fannie Mae Monthly Income Calculation section, click Preview for loan files missing a DU Casefile ID, or Accept for files where the DU Casefile ID has already been added.

List of Available Manual Options for Underwriters

Outcome

You can manage Fannie Mae R&W results for self-employed borrower income. You are able to track the relief status, add the DU Casefile ID and unaccept values for manual updates when necessary.