Freddie Mac Enhances Loan Prospector Tools
October 26, 2000
Instant Collateral Assessments Offer Cost Savings of 40 Percent
McLean, VA ? Freddie Mac announced today a new collateral assessment feature in its automated underwriting services, Loan Prospector® on the Internet and Loan Prospector Classic , that applies to loans sold to Freddie Mac. The enhancement lifts a long-standing Freddie Mac documentation requirement on borrowers' collateral, and gives lenders and borrowers the option to dramatically speed the loan-approval process, while reducing collateral assessment costs by up to 40 percent.
When receiving a Loan Prospector "Accept" decision to purchase a loan, lenders and brokers now will have the option to forego a property appraisal and inspection on some loans in exchange for a $200 delivery fee. The delivery fee relieves the lender of the associated representations-and-warranties on property value, marketability and condition.
Eligible loans include first-lien purchase money loans with total loan-to-value ratios of up to 80 percent. For loans that fall outside these parameters, Freddie Mac is streamlining its appraisal requirements to a 2055 Interior or a Uniform Residential Appraisal Report.
"Freddie Mac is continuing to leverage our modeling expertise to move forward with our corporate commitment to reduce mortgage origination costs," said David W. Glenn, Freddie Mac's vice chairman and president. "The Loan Prospector collateral enhancement allows Freddie Mac to save time and money for our customers and borrowers alike, while maintaining the credit standards we have adopted to help ensure that borrowers obtain homes they can afford and keep," he added.
The new Loan Prospector collateral feature will be available early next year. Lender, brokers and borrowers may still obtain a standard appraisal if they choose and not pay the delivery fee. The national average cost of an appraisal is $334. Freddie Mac anticipates that three out of five purchase money mortgages with downpayments of 20 percent or more will qualify for the enhancement.
"By providing faster decisions and lowering origination costs, this new Loan Prospector collateral assessment feature is a big win for the American mortgage lender and homebuyer," Glenn concluded.
Source: Freddie Mac