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


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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 homeownership eligibility assessments. loan purchase of its technology, 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), effective November 6, 2022.

“With the addition of positive monthly cash flow data, our underwriting system can help more accurately predict a borrower’s ability to repay their mortgage because it uses a comprehensive view of managing finances. over time,” said Terri Merlino, Freddie Mac Single. -Senior Vice President and Family Credit Manager. “Our latest innovation levels the playing field and helps make homes more accessible to borrowers whose lenders might not have qualified them with traditional underwriting methods. served.”

With the borrower’s permission, lenders and brokers can submit financial account data for LPA to identify 12 or more months of cash 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. Account data submitted can only positively affect the borrower’s credit risk assessment. To help identify opportunities, LPA will notify lenders when additional account data could benefit a borrower.

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

Working alongside our industry partners, we have made significant progress in modernizing the mortgage origination process, said Kevin Kauffman, vice president of customer engagement for Freddie Mac Single-Family. “In today’s market, our latest industry-leading innovation provides lenders with efficiencies that can lead to cost savings and improvements in the borrower experience, while meeting the strong standards of Freddie Mac’s Credit Underwriting.”

Early 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 on line.

To learn more, visit AIM Web page.

About Freddie MacFreddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our founding by Congress in 1970, we have made housing more accessible and affordable for buyers and renters in communities nationwide. We are building a better housing finance system for buyers, renters, lenders, investors and ratepayers. Learn more about FreddieMac.comTwitter @FreddieMac and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT: Chad Wandler703-903-2446[email protected]

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Source: Freddie Mac

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