Mortgage giant claims that lenders who adopt automation experience fewer loan defects, reduced loan production time, and cost savings compared to those with lower technology utilization.
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Intercontinental Exchange’s digital mortgage lending platform, Encompass, has been enhanced to offer deeper integrations with Freddie Mac’s automated underwriting system, Loan Product Advisor (LPA).
Encompass now provides feedback messages from Loan Product Advisor, offering actionable responses for issues related to debt-to-income ratios, loan-to-value ratios, and reserves. This helps lenders make faster, informed decisions and convert more cautions into accepts, as announced by Freddie Mac on Wednesday.
Encompass users also receive feedback on loan eligibility for employment representation and warranty relief, as well as qualification for automated valuations and appraisal alternatives.
Tim Bowler
“Encompass users can seamlessly access Freddie Mac’s latest LPA offerings within their existing workflows,” stated Tim Bowler, President of ICE Mortgage Technology. “Our goal is to enhance efficiency, reduce costs, and assist lenders in placing more qualified borrowers in affordable homes.”
Technology Decreases Loan Defect Rate
Lenders embracing technology have lower loan defect rates compared to competitors. Source: Freddie Mac
According to a February 2023 study by Freddie Mac, lenders adopting automated solutions experienced 40% fewer loan defects, saved $1,700 in costs, and reduced loan production times by seven days compared to those with lower technology utilization.
Kevin Kauffman
Technology is enabling lenders to originate more loans eligible for sale to Freddie Mac without altering their workflow,” stated Freddie Mac executive Kevin Kauffman. “We’re also providing lenders with detailed information on purchase requirements and cost-saving options for first-time homebuyers.”
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