Constellation Software’s Dark Matter Technologies rolled out an automated workflow in the Empower loan origination system (LOS) that makes it easier for lenders to identify and qualify loan applicants who could benefit from evaluation of their positive rent payment history.

Developed in partnership with Informative Research – a technology services and consulting company – utilizing the positive rent payment history enhancement in Fannie Mae’s underwriting system, known as Desktop Underwriter (DU), the workflow in the Empower LOS is designed to allow lenders to improve pull-through for borrowers who have a history of consecutive on-time rent payments. 

If a loan file is submitted to DU that can’t be approved as-is because of limited borrower credit history, but otherwise could be approved with sufficient rent payment history, DU will share that finding back to the lender. 

Fannie Mae began to incorporate customers’ rent payments into DU in September of 2021.

Fannie Mae’s DU enabled single-family lenders — with permission from mortgage applicants — to automatically identify recurring rent payments in the applicant’s bank statement data to deliver a more inclusive credit assessment.

By leveraging 12-month asset verification reports furnished by authorized providers such as Informative Research’s AccountChek and by using an integrated LOS such as Empower, lenders can use Fannie Mae’s DU automated underwriting system to take into account positive rent payment data when assessing the creditworthiness of certain first-time homebuyers.

Here’s how the automated workflow in Empower works behind-the-scenes:

• When a loan application is submitted to DU through Borrower Digital, or another front-end application integrated with the Empower LOS, and does not initially receive an approve-eligible recommendation, DU will determine whether rent payment data could provide a more favorable recommendation.

• If the DU findings recommend evaluating the applicant’s rent payment history, the automated engine within the Empower system will suggest obtaining a 12-month asset verification report through AccountChek. 

• The Empower LOS will play the role of the conductor, ensuring the consumer-permissioned asset data gathered from AccountChek is routed for resubmission to DU at exactly the right point in the process as identified by the originator.

“This is a prime use case of how business process automation can create value not only for lenders but for borrowers as well,” said Rich Gagliano, CEO of Dark Matter Technologies. “Our task-based orchestration engine allows lenders to improve pull-through for borrowers with nontraditional credit references without burdening loan officers or processors.”

In the fall of 2022, Fannie Mae launched a rent payment reporting pilot program to help renters of multifamily properties build their credit histories and improve their credit scores.

Eligible multifamily property owners were able to share rent payment data through a vendor network to TransUnion, Equifax and Experian in the renter’s credit profile.

In light of positive survey data and an impact analysis, Fannie Mae’s positive rent payment pilot program has been extended through December 2024.