Fannie Mae Eases DTI Requirements – Forgetting the Past, or Embracing the Future?

This past Saturday (July 29), Fannie Mae implemented a change that’s been in the works for several months. Starting now, Fannie will be able to approve mortgages with a debt-to-income (DTI) ratio of 50%, which is up from the 45% limit that had previously been in place. This change will expand the pool of prospective borrowers for the mortgage giant by as many as 95,000 per year.

There are certainly arguments in favor of such a move. As the HousingWire article linked-to above says, a disproportionate number of those new borrowers are likely to be Latino and African American families, who are 1.5 times more likely to have DTI’s above 45%. Business Insider has also pointed out that this move will also allow more millennials to get a mortgage, saying “Student loans are the largest source of debt in the U.S. apart from mortgages. And so, this eased requirement could benefit millennials who are looking to buy their first homes.”

For those who are concerned about an increase in potential defaults, the Washington Post comfortingly tells us, “Using data spanning nearly a decade and a half, Fannie’s researchers analyzed borrowers with DTIs in the 45 percent to 50 percent range and found that a significant number of them actually have good credit and are not prone to default.” (I wonder which “almost 15 years” they looked at?)

If you’re reading this and thinking to yourself that expanding the amount of debt a person can carry and still be approved for more debt is short-sighted, and asking for trouble, you’re certainly not alone. Events like the collapse in 2008/2009 have a way of living long in the memory, and concerns about history repeating itself are completely valid.

This puts mortgage lenders into a tight spot. On the one hand, there is constant pressure to grow—and to grow, you need to issue more loans. To issue more loans, you need more customers, and of course you can’t get more customers if you keep rejecting them. On the other hand, mortgage defaults are costly, and potentially disastrous when they occur en masse.

The answer, to me, lies not in loosening standards, but in looking at metrics that have been previously ignored. This is the era of big data, of AI analytics, of alternative lending, and alternative credit scoring. These are technologies that have been making their way onto the Finovate stage for years, and they are increasingly being pointed at mortgages and real estate. We have access to incredible amounts of data about potential borrowers, we can direct machine-learning algorithms to sift through it, giving us a much more complete picture of a mortgage applicant than ever before. Do the “old” mortgage standards account for our new capabilities? Probably not.

So should the acceptable DTI ratio go up? Yes, at least in some cases. It’s absurd to think that the current system is operating at 100% efficiency, awarding mortgages to all of the people who are “creditworthy,” however you define that metric. But in order to raise it responsibly, it needs to be balanced by other data points and analytics that can point to a clear picture of creditworthiness, a picture that lies outside what the traditional model can account for.

Is Fannie Mae doing this the right way, with a model that will expand their potential customer base without exposing them—and our economy—to more risk? Or have the lessons of 2009 been forgotten (ignored?) by a new wave of executives who are simply looking to boost the bottom line, regardless of potential long-term consequences? Only time will tell, but I hope this is the start of a new credit-decisioning model that reflects our newfound technological capabilities.

Join us at FinovateFall 2017 in New York to see live demos from innovative fintech companies. Mortgage tech and real estate tech will be prominent themes at this year’s show, both during the demos that will take place on September 11 and 12, and the discussion that will take place on September 13 and 14. To register, go to finovatefall.com.

Last Chance for FinovateFall Presale Tickets!

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FinovateFall 2017 will be returning to the Hilton Midtown from September 11 through 14, and tomorrow is the last chance to register for a Presale Ticket to save $800. This is the lowest-priced ticket we’ll offer — make sure you register now to lock in the savings!

FinovateFall 2016 was our largest event yet, with more than 1600 attendees on hand to view live demos (no slides allowed!) of exciting fintech innovations. We’re expanding the show this year to offer even more great content.

In addition to the two days of demos, we’re adding another day and a half full of practical advice from your peers and industry gurus alike. These discussions will provide more context around the demos you’ll see on stage and help you incorporate the latest fintech innovations into your product road map. For more information on our expansion, take a look at the agenda or the informational brochure.

Presale Tickets are still on sale for $1,595 through the end of this week. Not only is this the lowest ticket price we offer, but tickets are fully refundable until July 28, so there’s no risk in locking down the price now. Register today!

FinovateEurope — Regular Tickets Are Almost Sold Out!

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There is one week to go before FinovateEurope 2017, and our regular tickets are nearly sold out! There will be last-minute tickets available, but if you’re planning on joining us, we’d recommend booking today to avoid the £600 price jump.

Based on current projections, we expect to run out of regular tickets by the close of business tomorrow, 1 February (exact timing will be determined by demand).

Don’t miss out, register now to guarantee your spot!


FinovateEurope 2017 is sponsored by: Comarch, FT Partners, KPMG, Lleida.net and R/GA.

FinovateEurope 2017 is partners with: Aite Group, Bankers Hub, Banking Technology, Celent, eBanking News, FemTech Global, Financial IT, Fintech Finance, The Fintech Times, Harrington Starr, Headcount, Holland Fintech, IBS Intelligence, IU eMagazine, Mapa Research, Ovum, Paybefore, The Paypers, Plus Journal, Smart Insights, SME Finance Forum, and Verdict Financial.

FinovateEurope Full Presenter Lineup Announced!

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FinovateEurope 2017 is just two weeks away, and the excitement is building! We’re gearing up for another great conference showcasing the best in fintech innovation from and for the European market.

You may have already seen a list of our presenters, but we’re excited to announce our full roster (including all previously “stealth” companies) for the first time. Here is the complete list of companies who will be demoing in London on February 7 and 8:

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For more information on what you can expect to see, take a look at our “sneak peek” blog post series. We’ll continue to add sneak peeks as the event approaches.

Join us in the heart of London to see the newest technology from each of these innovative companies for yourself. Space is limited, so register early to guarantee your spot!


FinovateEurope 2017 is sponsored by: Comarch, FT Partners, KPMG and Lleida.net.

FinovateEurope 2017 is partners with: Aite Group, Bankers Hub, Banking Technology, Celent, eBanking News, FemTech Global, Financial IT, Fintech Finance, The Fintech Times, Harrington Starr, Headcount, Holland Fintech, IBS Intelligence, IU eMagazine, Mapa Research, Ovum, Paybefore, The Paypers, Plus Journal, Smart Insights, SME Finance Forum, and Verdict Financial.

FinovateEurope 2017 — £100 Early-Bird Discount Extended!

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FinovateEurope 2017 is just over a month away, and time is running out for discounted Early-Bird tickets. Save £100 off the cost of your ticket when you register by the end of the week.

FinovateEurope 2016 was the biggest European Finovate ever, and this year’s showcase promises to be another one you won’t want to miss. With so much going on in European fintech, it’s never been more important to stay up to date on all of the latest trends and innovations that will define the future of finance.

Over the course of two days, you’ll get to see 72 leading fintech innovators doing live, seven-minute demos of the latest tech they have coming out of the shop. No slides, no videos, just wall-to-wall demos giving you an incredibly efficient way to see the state of the industry in just two days.

Early-bird tickets are still on sale through this Friday, 6 January, giving you a chance to save £100 off the cost of your registration. Make sure you register now while there’s still room (and before the price goes up!).

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FinovateEurope 2017 is sponsored by: Comarch, FT Partners, KPMG and more to be announced.

FinovateEurope 2017 is partners with: Aite Group, Bankers Hub, Banking Technology, Fintech Finance, Harrington Starr, Headcount, Mapa Research, Paybefore, and SME Finance Forum.

FinovateEurope Early Bird Discount Extended!

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2015 is officially behind us, and FinovateEurope 2016 is on pace to be our largest European event yet. A huge number of people registered in advance of the early bird ticket deadline back in December, but if you were out of the office and missed the deadline, no worries! We’ve extended the early-bird sales to this Friday, 8 January, to give everyone one more chance to save £100 on the cost of their ticket.

Finovate’s unique mix of live demos (no slides allowed!) and high-impact networking sessions offers an incredibly efficient way to stay up to speed on the fast-moving world of European fintech. This is your chance to connect with the influential innovators defining the future of finance and see the best of what the industry has to offer. Seating is limited, so lock in your spot (and the £100 discount) today!

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Check out the FinovateEurope homepage for more information, including a list of confirmed presenters. Also, our Sneak Peek blog series details what our presenters will show off on stage. For any other questions, email us at europe@finovate.com.

FinovateEurope 2016: Register by Friday and Save £100!

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We’re less than two months away from FinovateEurope 2016, and time is running out for discounted early-bird tickets. Save £100 off the cost of your ticket when you register before the end of the week!

European fintech is booming. It’s exciting to see all of the activity in the space, but with so much going on, it’s never been more important to stay up-to-date on the latest trends and innovations that will define the future of finance. FinovateEurope—9/10 February in London—is your chance to see 72 innovative companies demoing their latest technology. No slides, no videos, just wall-to-wall demos, giving you an incredibly efficient way to see the state of the industry in just two days.

Last year’s event sold out, with 1,250 senior executives, venture capitalists, press, analysts, and industry insiders on hand to take it all in. We’ve expanded seating for 2016, but we can already tell this year’s event is going to be even more popular.

Early-bird tickets are still on sale through this Friday, 18 December, giving you a chance to save £100 off the cost of your registration. Make sure you register now while there’s still room (and before the price goes up!).

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FinovateSpring 2016: Last Chance for Presale Tickets!

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As we approach the darkest, coldest day of the year, I find my thoughts turning to Silicon Valley in the springtime, and of course, FinovateSpring. We’ll be returning to San Jose’s City National Civic on 10/11 May 2016 for another intensive demo-only showcase of the best new innovations in financial and banking technology, and I, for one, can’t wait to see what fintech’s brightest innovators plan on rolling out of the shop.

Discounted presale tickets are on sale through the end of this week, and there’s no better time to register. Presale tickets are the lowest-priced tickets that we will offer, and they’re a whopping $400 off of the regular ticket price. And since tickets are completely refundable through 26 March 2016, there’s no risk in locking in the lowest price now.

FinovateSpring 2015 was our largest West Coast event so far, and we’re expecting 2016 to be even bigger and better. Give yourself an excuse to daydream about warm California sun and the excitement and energy that comes from having so many enterprising, innovative fintech professionals gathered in one place. Register today!

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If you want to apply to demo at FinovateSpring, there’s still time to submit your application. Email spring@finovate.com for more details, and watch a few live demo videos from last year’s presenters to get an idea of what to expect.