Starting on June 1, Freddie Mac will no longer charge lenders $20 to use its automated underwriting service, Loan Prospector, in order to make doing business together simpler.
Loan Prospector is a risk-assessment tool that gives lenders ready access to Freddie Mac’s credit and pricing terms.
Currently, lenders pay to submit a mortgage application to Loan Prospector to receive an automated decision about whether the loan meets the company’s requirements for purchase.
Brad German, a spokesperson for Freddie Mac, said that the change was spurred by the awareness of the cost its customers are dealing with. Freddie made a decision to make an investment in its customers, which in turn, will enable them to help more borrowers and improve liquidity in the marketplace.
The announcement was first made in a letter to clients shortly before the Mortgage Bankers Association’s National Secondary Market Conference in May.
German clarified that no fee will be added elsewhere to offset the loss of income.
Previously, for $20, users would get a Loan Prospector assessment in minutes and infile credit reports from the three national credit repositories.
Loan Prospector assesses only a loan's eligibility for sale to Freddie Mac and does not analyze compliance with laws, regulations or ordinances, or any requirements imposed by a regulator.
For more information on Loan Prospector, check out its website here.