Finally! It’s all about the Data

Fannie Mae and Freddie Mac, along with their primary regulator, the Federal Housing Finance Agency, are rolling out a new Uniform Mortgage Data Program.

The former GSEs, companies that invested billions in securities backed by risky subprime loans, are now saying that better data is the answer to better loans and plan to put the new standards into place later this year. Freddie Mac vice president Patricia McClung spoke about the new standards on Freddie’s blog on Monday.

McClung said that better data will lead to better loans. She said the new program would identify potential defects earlier in the mortgage process, improving the quality of the company’s mortgage purchases and reducing repurchase risk for lenders. She’s right. Mortgage Cadence has been preaching that it’s all about the data since 2003.

It’s never been about the forms. Recording into the public record is important, but it’s always been about the data integrity, that’s what allows for the creation of quality loans. Systems like Mortgage Cadence have been built with sophisticated data models and proprietary rules engines that allow lenders to systematically check for data that has changed or is missing throughout the life cycle of the loan. Our vision has been to provide a clear data trail to our lenders from the time it’s just a lead, all the way through to the time it’s sold off into the secondary market and beyond.

Having the confidence that comes from having that clear data trail will help the industry originate a higher quality product. That’s only possible with auditing capabilities built into the software that lets everyone know what the information is, where it came from and who has altered it. That capability has been in Mortgage Cadence since 1999.

Quality originations will be the only ones that satisfy secondary mortgage market investors in the future. I’m glad to see someone else is finally singing the same tune.