- Machine learning automation can save lenders up to $1,500 (14%) per loan.
- Reduces loan production cycle time by 5 days.
- ACE waivers have saved families over $2 billion in appraisal costs since 2017.
Freddie Mac (OTCQB: FMCC) has announced significant enhancements to its underwriting process with the introduction of automated features leveraging machine learning. These updates are integrated into the Loan Product Advisor® (LPA®), and can potentially save mortgage originators up to $1,500 per loan, marking a 14% cost reduction. Moreover, these automations have the capability to reduce the loan production cycle time by 5 days.
A notable introduction is the Freddie Mac Income Calculator, a free tool designed to assist lenders in accurately calculating income for gig economy workers and self-employed borrowers. This tool is set to expand later in the year to include considerations for pensions, social security, and rental income.
Freddie Mac's automated collateral evaluation (ACE) waivers have already provided significant savings, with over $2 billion in appraisal costs saved for families since 2017. Furthermore, the LPA Choice® feature has successfully enabled an additional 18,000 borrowers to qualify for mortgages.
The advancements aim to support a fully digitized mortgage process, reducing costs by up to 40%. Lenders employing these machine learning-based automations experience enhanced efficiency, lower origination costs, and improved customer satisfaction. The new LPA enhancements are available immediately, and lenders are encouraged to consult with their platform providers for specific release dates on their loan origination systems (LOS).
