Credit scores are a key input in predicting prepayment speeds, which in turn affect valuations and hedge strategies.

Nonbanks handled 60.7% of GSE servicing as of the end of June.

“We have far too many long-term assets on our balance sheet,” said Federal Reserve Governor Christopher Waller.

While many of these tools have been included in GSE automated underwriting systems for some time now, both Fannie and Freddie are highlighting the role of third-party data, income modeling and rent recognition in reducing friction and expanding the pool of mortgage-eligible borrowers.

Although total GSE servicing remained almost unchanged as of the end of the second quarter, some large servicers — mostly nonbanks — experienced disproportionate year-over-year gains in volume. (Includes two data tables.)

Just one week after VantageScore 4.0 credit score was allowed for underwriting GSE-eligible loans, competitor FICO released data appearing to show that FICO 10 T has superior predictive capabilities.

The GSEs’ automated underwriting systems now include income calculators, appraisal waivers and tools to assess the rental payment history of borrowers.

By one estimate, if Fannie’s title acceptance pilot were allowed to expand, it could save consumers as much as $96 million a year without significantly increasing the risk of title defects.

Nearly $297 million in non-performing Fannie loans have hit the auction block so far in July. That includes an $8.1 million community impact pool.

Fannie’s Financial Crimes Investigation team warns lenders of a string of fraudulent cash-out refis in the New Jersey area.