The Mortgage Consumer Bill of Rights

As the leader of the country’s housing industry, Fannie Mae has made an American Dream Commitment as an effort to create home ownership opportunities for people from all walks of life and to create more protections and opportunities for homeowners everywhere. The American Dream Commitment is a ten year, two trillion dollar initiative that pledges to increase home ownership rates and assist 18 million families in obtaining homes and affording them.

Chairman of Fannie Mae announced in 2000 the execution of a bill to help protect homeowners even further. In this established bill, called the “Mortgage Consumer Bill of Rights,” consumers became protected in a number of ways such as having the right to access mortgage credit, the right to know the true cost of a mortgage, the right to the lowest mortgage rate for which one can qualify, the right to be free of regulations and the right to know why a lender approves or rejects a mortgage application.

Along with the Mortgage Consumer Bill of Rights, Fannie Mae created the Open Book approach to automated underwriting, which disclosed the loan factors uses by the Desktop Underwriter system. This system evaluates a mortgage application and dissects the information in order to approve or reject the application.

After the open book policy emerged, homeowners could find out what credit characteristics affected the lender’s decision as well as how the information was examined to assess the loan borrower’s credit.

At the same time, Fannie Mae also announced the birth of the True Cost Calculator. This internet-accessible calculator helps users find the best mortgage deal for their desired home, and saves the home buyer unnecessary time and money.