Fannie Mae and Freddie Mac target income and occupancy fraud to reduce buybacks

Fannie Mae and Freddie Mac are deploying new technology to flag occupancy risk and income defects before closing, HousingWire reported. The government sponsored enterprises aim to reduce closing costs and lower repurchase risk for lenders by automating income verification and detecting occupancy fraud earlier in the process. [1]

HousingWire reported that Fannie Mae has processed approximately 5.4 million loans using alternative valuation methods. These streamlined appraisal alternatives generated an estimated 3 billion dollars in consumer savings through the middle of the year, according to Fannie Mae executive vice president Jake Williamson. [1]

The mortgage giants previously focused on valuation modernization through appraisal waivers and title alternatives. According to HousingWire, the current push expands technology use to verify income and confirm borrower occupancy, which remain primary drivers of loan defects and buyback demands. [1]