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8 | TH E M R EP O RT TAKE 5 M // What are the biggest challenges you face in your role? DAVIS // I spend a lot of time working with Fannie Mae's investors and looking for ways to continue to expand our investor base. Building and promoting liquidity in the market is one of our most important goals as a company, and our investors are critical to this mission. A challenge that I face every day is ensuring that we are serving our investor partners by providing them with ongoing information and a high degree of transparency. One important aspect of this is making sure that we are bringing investors along on our journey as we seek to transform the mortgage industry. As Fannie Mae drives innova- tion in the industry through tools like Collateral Underwriter (CU) and Day 1 Certainty, we need to make sure that we are not only communicating the value of these tools to help our lender partners simplify their business, but that we are also helping investors understand how these tools improve loan quality and reduce risk. M // In what ways have you seen servicers use new technology to streamline processes? DAVIS // We're tremen- dously proud of the power that Servicing Management Default Underwriter (SMDU) has brought to servicers. SMDU simplifies the eligibility determination for all Fannie Mae loss mitigation programs so servicers can reduce cycle times, costs, and uncertainty in loss mitigation. As a result, servicers are able to provide more efficient and effec- tive workout solutions to borrowers. Working with Fannie Mae's credit investors, I often spend time discussing Fannie Mae's loss mitigation solutions, and the role that SMDU plays in helping servicers work with borrowers. Investors immediately understand the value of SMDU in helping to re- duce credit losses by bringing timely, consistent, and effective solutions to our servicer partners. M // What will the mortgage industry look like 10 years from now? DAVIS // I believe we are on the cusp of a dramatic transformation of the mortgage industry as we begin the transition to data over docu- ments. Today, the mortgage origina- tion process is still way too paper intensive, complex, manual, and time consuming. As a company, our future vision is driven by a focus on data–re- ducing paper by connecting directly to data providers for validation, and making the mortgage process more automated, efficient, and faster. Our data-over-documents approach is aimed at streamlining processes, improving loan manufacturing qual- ity, and creating certainty for our customers. Because of our ability today to access tremendous amounts of source data, we can help lenders streamline their business in ways that are very different than the types of streamlined approaches we saw back in the mid-2000s. Back then, streamlining often meant increasing risk by reducing verification or waiving documenta- tion altogether. Today, we are able to streamline processes in ways that re- duce risk by going directly to source data for verification. This saves time for our lenders and their borrowers, and it also helps to produce better quality loans for our investors. M // Is there an obstacle in your career that you have overcome that has led you to the position you are in now? DAVIS // I can't pinpoint a specific obstacle, but when I look back at Balancing Risk vs. Reward Learn how Fannie Mae develops and executes strategies to transfer credit risk. Laurel Davis is Fannie Mae's VP for Credit Risk Transfer, reporting to the EVP of Single-Family Underwriting, Pricing, and Capital Markets. She is responsible for developing and executing strategies to transfer credit risk associated with Fannie Mae's single-family guaranty business to the capital markets and private investors. This includes directing Fannie Mae's Connecticut Avenue Securities (CAS) program. Prior to her present appointment in 2011, Davis was Fannie Mae's VP for the Single-Family Investor Channel where she led a team responsible for sourcing, pricing, trading, and executing bulk mortgage transactions from customers. "Companies in our industry are starting to understand that they need to have a diverse and inclusive workforce to best serve the diverse communities that their customers represent. As leaders, it's important for us to foster a diverse pipeline of talent to ensure we are attracting the best and brightest into our business."

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