The release of Desktop Underwriter® Version 10.1 means more convenience for borrowers applying for conventional loans, cutting back on appraisals, project reviews, and self-employment income requirements. Not only that, Fannie Mae allows for shortened or truncated asset account numbers to further protect mortgage borrowers’ financial information.
Indeed, the recent Equifax data breach reiterates the need to secure sensitive private information. Effective July 29, asset account numbers can appear truncated on mortgage applications, asset documentation, and case files in DU®.
This measure is in addition to electronic signatures and secure portals put in place by Fannie Mae in a wider effort to safeguard nonpublic information of borrowers applying for conventional mortgages.
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Truncated Asset Account Numbers Permissible on DU® Loan Case Files
DU® Version 10.1 takes the protection of borrower confidential information a step further with truncated asset account numbers.
It’s a turnaround from Fannie Mae’s previous guidelines about not altering, e.g. crossing out an account number on a borrower’s asset documentation. Asset account numbers must be spelled out entirely.
Under its update, Fannie Mae via DU® 10.1 permits that only the last four digits of the borrower’s bank, investment, or portfolio account numbers will show on his/her loan case file.
This shortening of account numbers is applicable to all asset accounts included in the borrower’s mortgage application. Truncated asset account numbers are also permissible on verification reports issued by DU®’s Validation Service.
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Fannie Mae’s Policy on Confidentiality of Information, Data Breach
As early as January 2017, Fannie Mae has updated its measures concerning confidentiality of information obtained by mortgage sellers or servicers from borrowers and Fannie Mae itself.
The updated policies reflect (i) a clear definition of what constitutes confidential information, (ii) clear notice requirements to be complied by mortgage sellers/servicers when required by law to disclose confidential information, (iii) notice procedures to be followed by sellers/servicers when there is a data breach, as well as (iv) new requirements for sellers/servicers to ensure the integrity, security, and confidentiality of Fannie Mae confidential information, among other things.
For instance, mortgage sellers/servicers must fully comply with federal, state and local laws that affect Fannie Mae. These include laws and regulations concerning borrower privacy, data security, electronic signatures, and electronic notarization.
Data Breach Measures
Where there is a data breach, Fannie Mae sets out these protocol for mortgage servicers/sellers to abide.
They must provide a written notice to the borrowers or relevant state agencies as required by privacy and data security breach laws. A copy of this notice will be kept and included in the individual mortgage borrower’s loan file.
Mortgage sellers are required to inform Fannie Mae of any data breach affecting 10 or more mortgage borrowers within 72 hours and to fully cooperate with the GSE.
In today’s world where automation is indispensable in making mortgages more accessible to consumers, Fannie Mae’s implementation of truncated asset account numbers is an extra layer of protection given to borrowers.
Justin McHood is a managing partner at Suited Connector and has been recognized by national media outlets as a financial expert for more than a decade.