Blue Sage Solutions, a provider of end-to-end mortgage technology, recently announced today that it is the first loan origination system (LOS) to fully integrate Fannie Mae's Income Calculator. This API-enabled integration, directly initiated from the LOS, streamlines calculation for borrowers with income from self-employment or business ownership, enabling faster, more accurate mortgage approvals for lenders, according to a press release.

One of the key benefits of this integration is that Fannie Mae offers rep and warrant relief on the income calculations generated by their tool. Lenders can confidently rely on the accuracy of the qualifying income amount returned by Fannie Mae’s Income Calculator, reducing the risk of future loan buybacks due to income calculation errors.

By integrating this feature directly into Blue Sage’s Digital Lending Platform, the release stated, lenders can not only improve processing times, they can also reduce compliance risk while delivering a smoother experience for borrowers.

Traditionally, calculating self-employment income has been a time-consuming process due to the complexity of business structures and non-traditional income sources. Fannie Mae’s Income Calculator addresses these challenges by automating the calculation of income from business tax returns, personal tax returns, and other tax documents.

Lenders can also benefit from allowable add-backs not included in 4506-C tax return transcripts, which maximizes borrower income and may lower DTI ratios.

“This represents a major leap forward in how lenders handle loans involving self-employed borrowers,” Carmine Cacciavillani, founder and president of Blue Sage, said in the release. “Our integration not only speeds up the income calculation process, but does so with greater accuracy, resulting in fewer defects. For lenders, this means less time spent on manual reviews and more time delivering a fast, reliable and enjoyable customer experience to their borrowers. We're proud to be the first LOS to bring a fully integrated capability to the market.”

“Fannie Mae strives to make the origination process more efficient and to help lenders avoid issues that may potentially arise in downstream loan quality reviews,” Mark Fisher, vice president of Single-Family Credit Risk Solutions at Fannie Mae, said. “Working with technology service providers will continue to make Income Calculator widely available, assisting lenders to avoid these pain points to accurately calculate income for self-employed borrowers.”