Freddie Mac announces new program designed to make it easier for lenders to lend

Loan Advisor Suite aims to give clarification in appraisal process, reduce repurchase risk

As part of an effort to provide lenders with certainty, support and solutions, Freddie Mac announced a new program that should enable lenders to lend more confidently, armed with more knowledge about how Freddie Mac views the loans it purchases.

Freddie Mac unveiled the new program, which is called Loan Advisor Suite, at the Mortgage Bankers Association's 102nd Annual Convention & Expo, taking place this week in San Diego.

According to Freddie Mac, Loan Advisor Suite is a “flexible, end-to-end loan quality solution,” which has been in development for the last year in collaboration with national, regional and local lenders and industry vendors.

In a release, Freddie Mac said that Loan Advisor Suite is a set of integrated software applications designed to give lenders a way to originate and deliver high quality mortgages to Freddie Mac and acquire insight into representation and warranty relief earlier in the loan production process.

According to Freddie Mac, Loan Advisor Suite was designed in collaboration with large and small lenders to create an “easily adopted” suite of applications and services that address borrower credit and capacity, collateral valuations, data confirmation and validation and other loan production quality issues.

The Loan Advisor Suite makes Freddie Mac’s purchase requirements more transparent to lenders and provides lenders with “clear, actionable” feedback messages during the mortgage production process, Freddie Mac said.

Actionable feedback is something that Freddie Mac believes is a big step in a positive direction for the mortgage industry.

“Loan Advisor Suite will give lenders guidance, support and insight into what Freddie Mac things about their loans while they’re in production,” Christina Boyle, Freddie Mac’s senior vice president of sales and relationship management, told HousingWire in advance of the announcement.

“We think these tools will provide a lot of power to lenders,” Boyle said. “These tools were developed with a lot of feedback from the industry. All of these tools take a lot of cost out of the back end for lenders. They won’t have loans that they need to repair or rework with customers.”

According to Freddie Mac, Loan Advisor Suite integrates new applications and services, like Freddie Mac’s Loan Collateral Advisor with Freddie Mac Loan Prospector, Loan Quality Advisor and other widely used Freddie Mac customer technology.

Loan Collateral Advisor is Freddie Mac’s newest offering, and Boyle told HousingWire that it is the “most exciting” part of the Loan Advisor Suite.

Loan Collateral Advisor is designed to work with lenders’ existing processes so they can address valuation issues prior to delivery, Freddie Mac said.

According to Freddie Mac, Loan Collateral Advisor will perform appraisal quality reviews and return clear, actionable messages through the Uniform Collateral Data Portal.

“Collateral has long been one of the most difficult aspects of the loan,” Boyle said. “This was co-developed with lenders. We tailored it to what their needs were. They showed us where we could improve their process. This will provide clarification in the appraisal process, reduce repurchase risk and give lenders a greater partnership with us.”

Boyle told HousingWire that Loan Collateral Advisor is different than Fannie Mae’s Collateral Underwriter, which engendered a strong reaction from the industry when it was released last year.

“My understanding is that it was an internal tool that they offered to the market,” Boyle said of Collateral Underwriter.

“It created some confusion. It was built to their process. They were auditing, if you will,” Boyle said. “The way the were delivering their data was not actionable. So we built something that is usable for lenders from day one. It will be usable by appraisers as well. We expect that they will want to touch the tool as well.”

Andrew Higginbotham, Freddie Mac’s senior vice president of single-family strategic delivery, said that the entire Loan Advisor Suite is an example of Freddie Mac’s “clear strategy” to partner with the industry.

“We are developing Loan Advisor Suite through a lender’s lens to make it easier for our customers to do better business with Freddie Mac,” Higginbotham said.

“The result is a powerful suite of integrated applications to make it simpler for our customers to originate high quality mortgages that meet Freddie Mac requirements,” he added.

“Loan Advisor Suite also will help our customers find better ways to control costs, boost efficiency and make fuller use of our credit box, Higginbotham continued. “Loan Advisor Suite is another example of how we are working with lenders to give lenders a higher level of certainty when they do business with Freddie Mac.”

When used together, Loan Advisor Suite’s integrated applications will notify Freddie Mac customers about their eligibility for representation and warranty relief earlier in the loan production process, Freddie Mac said.

Lenders can use Loan Advisor Suite’s applications individually but greater benefits will be realized when all of the applications are used together, Freddie Mac added.

Boyle said that the program is not mandatory for lenders, but encourages them to use it. “We want the tools to be used,” Boyle said. “We don’t mandate them. We want them to use them. We feel they make sense.”

Higginbotham said that the tools will be free to use. “This is really an investment in our customers,” he said. “It’s not our intention to charge for the tools.”

According to Freddie Mac, the Loan Advisor Suite will be made available through multiple channels, including the Internet and existing loan origination systems, beginning in 2016.

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