Blend’s Soft Credit Functionality Supports Fannie Mae’s Desktop Underwriter Early Assessment Enhancement

Blend, a leading provider of cloud banking services, announced today that it supports Fannie Mae’s Desktop Underwriter (DU) early assessment enhancement with a direct integration from Blend’s soft credit pull functionality. Blend’s soft credit pull feature enables lenders to reduce the costs associated with the early stages of the mortgage origination process, as well as help educate borrowers earlier in their home buying journey.

Starting in 2023, the cost to pull a hard credit file has increased and comes during a difficult time for an industry already dealing with significantly high costs to originate.

Traditionally, early in the origination process, where buyer fallout is highest, lenders will qualify borrowers by using a “tri-merge” hard credit pull. If the borrower does not move forward with that lender, the lender will typically absorb the cost as a loss. As a result, the mortgage industry is moving towards using a soft credit data file early in the origination process for qualifying and assessment in the pre-qualification and pre-approval phase.

Blend first piloted its soft credit functionality for lenders in July 2022 and announced its general availability in May 2023. As the first and only digital banking platform to support soft credit pulls in the mortgage pre-qualification process, Blend has helped its customers - including Paramount Residential Mortgage Group, U.S. Bank, and PNC Bank - unlock significant cost savings, optimize their pre-qualification process, and ultimately provide their borrowers with a better lending experience. According to initial data from Blend, lenders who have adopted soft credit pulls have the potential to save up to 71% compared to utilizing all hard inquiries.

With the availability of Fannie Mae’s DU early assessment, more lenders will be able to leverage the benefits of soft credit functionality within Blend’s digital platform.

“Early assessment in Desktop Underwriter can provide lenders with increased certainty during their pre-qualification process, which benefits borrowers as well,” said Mark Fisher, Vice President of Single-Family Credit Risk Solutions at Fannie Mae. “We’re pleased this offering is now available to enhance the experience for both lenders and borrowers at the beginning of the mortgage process, in particular allowing them to get an early look at eligibility for our mission-oriented options for credit-worthy borrowers.”