Freddie Mac's Loan Prospector® Tools Collateral Enhancement Feature Available April 8 --
March 21, 2001
Instant Collateral Approvals at Point-of-Sale Offer Cost Savings of up to 80 Percent
McLean, VA ? Freddie Mac?s new no-appraisal feature in its automated underwriting services, Loan Prospector ® on the Internet and Loan Prospector ® Classic, becomes available April 8 for some low-risk loans sold to Freddie Mac.
The enhancement to Loan Prospector lifts Freddie Mac?s appraisal requirements for first-lien purchase money loans with total loan-to-value ratios of up to 80 percent and for borrowers with excellent credit histories. Freddie Mac anticipates that approximately 40 percent of purchase money mortgages with downpayments of 20 percent or more will qualify for the no-appraisal option, potentially saving homebuyers $500 million.
The no-appraisal option gives lenders and borrowers the opportunity to dramatically speed the loan-approval process while reducing collateral assessment costs by up to 80 percent, based on the national average appraisal cost of $334.
For loans that qualify for the no-appraisal feature, lenders may either choose this option, pay a $50 or $200 delivery fee to Freddie Mac, and receive waivers for the representations and warranties on property value, condition and marketability, or choose to order an appraisal and not pay a delivery fee.
"Freddie Mac is giving mortgage brokers, lenders and borrowers more collateral choices that help speed the loan process and decrease processing costs," said Paul Peterson, executive vice president of Single Family Business for Freddie Mac. "Freddie Mac continues to leverage our credit risk management expertise to reduce origination costs by hundreds of dollars, thus making homeownership more affordable while maintaining our sound credit standards."
Source: Freddie Mac