Skip to main content

Freddie Mac Announces Underwriting Innovation to Help Lenders Qualify More Borrowers for a Mortgage

Written by Customer Service on . Posted in Public Companies.

Industry-First Capability Will Also Help Lenders Qualify More First-Time and Underserved Borrowers

MCLEAN, Va., Oct. 17, 2022 (GLOBE NEWSWIRE) — Freddie Mac (OTCQB: FMCC) will increase homeownership opportunities by including a review of a borrower’s bank account data to identify a history of positive monthly cash flow activity as part of its technology’s loan purchase eligibility assessments, the company announced today. This industry-first innovation will be available to mortgage lenders nationwide through Freddie Mac’s automated underwriting system, Loan Product Advisor® (LPASM), beginning November 6, 2022.

“With the addition of positive monthly cash flow data, our underwriting system can help with more accurately predicting a borrower’s ability to pay their mortgage because it uses a comprehensive view of how personal finances are managed over time,” said Terri Merlino, Freddie Mac Single-Family senior vice president and chief credit officer. “Our latest innovation levels the playing field and helps make homes more accessible to borrowers whose lenders might not have qualified them with traditional methods of underwriting. This should particularly help first-time homebuyers and underserved communities.”

With the borrower’s permission, lenders and brokers can submit financial account data for LPA to identify 12 or more months of cash flow activity for inclusion in the tool’s risk assessment. Data can be obtained from checking, savings and investment accounts, including those used for direct deposit of income and monthly bill payments, such as rent, utilities and auto loans. The account data submitted can only positively affect the borrower’s credit risk assessment. To help identify opportunities, LPA will notify lenders when submitting additional account data could benefit a borrower.

Lenders and brokers can obtain the financial account data from designated third-party service providers using the same automated process they currently use to verify assets, income (using direct deposit), employment, and on-time rent payments via a single report through LPA’s asset and income modeler (AIM).

Working alongside our industry partners, we have made significant progress toward modernizing the mortgage origination process,” said Kevin Kauffman, Freddie Mac Single-Family vice president of client engagement. “In the current market, our latest industry-leading innovation delivers lender efficiencies that can lead to cost savings and improvements to the borrower experience, while meeting Freddie Mac’s strong credit underwriting standards.”

Initial service providers supporting Freddie Mac’s LPA borrower cash flow assessment include Blend, Finicity (a MasterCard company), FormFree and PointServ. Freddie Mac’s privacy policy is available online.

To learn more, visit the AIM webpage.

About Freddie Mac
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT: Chad Wandler
703-903-2446
Chad_Wandler@FreddieMac.com

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Important Notice for Investors:

The services and products offered by Goldalea Capital Ltd. are intended exclusively for professional market participants as defined by applicable laws and regulations. This typically includes institutional investors, qualified investors, and high-net-worth individuals who have sufficient knowledge, experience, resources, and independence to assess the risks of trading on their own.

No Investment Advice:

The information, analyses, and market data provided are for general information purposes only and do not constitute individual investment advice. They should not be construed as a basis for investment decisions and do not take into account the specific investment objectives, financial situation, or individual needs of any recipient.

High Risks:

Trading in financial instruments is associated with significant risks and may result in the complete loss of the invested capital. Goldalea Capital Ltd. accepts no liability for losses incurred as a result of the use of the information provided or the execution of transactions.

Sole Responsibility:

The decision to invest or not to invest is solely the responsibility of the investor. Investors should obtain comprehensive information about the risks involved before making any investment decision and, if necessary, seek independent advice.

No Guarantees:

Goldalea Capital Ltd. makes no warranties or representations as to the accuracy, completeness, or timeliness of the information provided. Markets are subject to constant change, and past performance is not a reliable indicator of future results.

Regional Restrictions:

The services offered by Goldalea Capital Ltd. may not be available to all persons or in all countries. It is the responsibility of the investor to ensure that they are authorized to use the services offered.

Please note: This disclaimer is for general information purposes only and does not replace individual legal or tax advice.