Not to be outdone by Fannie Mae’s announcement that it plans to offer lenders “Day 1” representation and warranty relief, Freddie Mac announced Monday that it is planning a series of enhancements to its Loan Advisor Suite designed to cut mortgage origination costs for lenders.

The announcement comes exactly one year after Freddie Mac first introduced the Loan Advisor Suite at last year’s Mortgage Bankers Association's Annual Convention.

At the time, Freddie Mac said that the Loan Advisor Suite was 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.

Freddie Mac later upgraded the Loan Advisor Suite to provide lenders with “actionable feedback” throughout the loan production process, which is designed to help lenders lend more often and with more confidence.

Now, Freddie Mac enhancing its Loan Advisor Suite, with the aim of helping lenders’ bottom line at a time when mortgage origination costs are still much higher than historical norms.

Freddie Mac said these new tools, which will be available in spring 2017, will reduce costs for lenders and provide greater certainty and valuable insights throughout the loan production process.

Freddie Mac said that the Loan Advisor Suite will now offer the following:

  • A no-cost automated appraisal alternative
  • Automated borrower income verification
  • Automated borrower asset verification
  • Automated assessment of borrowers without credit scores

Freddie Mac said that it also expects that Loan Advisor Suite will “broadly offer” collateral representation and warranty relief in early 2017, which is intended to “significantly relieve” mortgage lenders from the risk of loan repurchase due to appraisal defects.

Currently, Freddie Mac offers collateral representation and warranty relief in select circumstances, the government-sponsored enterprise said.

“These powerful enhancements are indicative of the dramatic changes happening in financial services globally,” said David Lowman, executive vice president of Freddie Mac's single-family business. “As the cost of originating a mortgage has more than doubled since before the financial crisis, we're collaborating with lenders to create innovative tools that reduce the costs of producing and selling high-quality loans to us.”

Freddie Mac said that these new tools provide automation and transparency in the loan production process, because Loan Advisor Suite assesses credit, capacity, and collateral to help lenders validate the quality of the loans they originate.

“We have more than 40 years of historical data that provides the foundation of Loan Advisor Suite,” said Andy Higginbotham, senior vice president of strategic delivery for Freddie Mac's single-family business. “By pairing big data with advanced analytics, we're creating efficiencies and reducing costs for lenders and borrowers.”