Ellie Mae will add new integrations of Fannie Mae's automated loan review technology to its loan origination system to help lenders ensure loans remain eligible for sale throughout the underwriting process and eliminate surprises at the end.
The software company in Pleasanton, Calif., announced earlier this week that it would integrate Fannie Mae's suite of risk management tools, including its Desktop Underwriter, Collateral Underwriter and EarlyCheck software, into the Encompass LOS.
The move incorporates the Fannie Mae products in a "more elegant way and allows for greater predictability and consistency in the loans," Joe Tyrrell, Ellie Mae executive vice president of corporate strategy, said in an interview.
Previously, loan data checks happen at the end of the origination process, leaving room for errors, Tyrrell explained. Through the partnership, the information check is integrated into the Encompass workflow so changes that can affect loan approval or conditions are known immediately.
"It proactively alerts you when there is a discrepancy so that you can re-evaluate the conditions immediately, rather than being surprised at the end," Tyrrell said.
Additionally, Ellie Mae said Wednesday that it released a new version of the Encompass system. Encompass 15.1 includes features to accommodate lenders' compliance with the Consumer Financial Protection Bureau's TILA-RESPA integrated disclosure rules, also known as TRID, which take effect on Oct. 3.
The partnership with Fannie Mae should also make it easier for lenders to send loans to the government-sponsored enterprise, Tyrrell said, because the integration improves the process of exporting delivery files.
"The system can just connect seamlessly and the data can be transferred by the click of a button," Tyrrell said.
It is not an exclusive relationship with Fannie Mae, but Ellie Mae sees its advantage in offering a single system of record.
"Data doesn't have to leave our system," Tyrrell said. Customers have "access to everything within the origination ecosystem. It is all-in-one, end-to-end."
Tyrrell said the partnership stemmed from requests from its customers who are looking for a more streamlined process.
"Origination costs have gone up exponentially and our customers are asking us to help them gain efficiencies while they still meet all the regulatory requirements and obligations," he said.
Tyrrell also said customers won't be charged extra for the service. He declined to detail the financial terms of the partnership between the two entities.
Fannie Mae didn't return a call for comment, but in a press release issued by Ellie Mae, Fannie Mae said it shares a common goal of providing "best-in-class tools" to lenders.
"By partnering with Ellie Mae, we will leverage our combined technological innovation and expertise to create even greater automation and transparency," said Steve Pawlowski, senior vice president of strategic initiatives and business solutions at Fannie Mae. "Together, we will provide our customers with greater certainty and access to technology that makes it easier to do business with us."