WASHINGTON (5/29/15)--A tool that gives lenders access to Freddie Mac’s credit and pricing terms will be free to use starting Monday, Freddie Mac has announced.
Loan Prospector is a risk assessment tool that provides automatic underwriting.
Currently, lenders pay $20 to submit applications to Loan Prospector, which uses credit data from national credit repositories and statistical models to assess the “three Cs:” credit reputation, capacity and collateral. It uses this data to assist the originator in determining a borrower’s creditworthiness and the acceptability of the loan application.
The tool also determines if the loan would be eligible to be purchased by Freddie Mac, though it does not assess compliance with relevant laws, regulations, ordinances or regulatory agency requirements.
“It's an effort to help lenders get a handle on costs. That, in turn, should help promote liquidity in the market," Freddie Mac spokesperson Brad German said in an interview with National Mortgage News this week.
German also added that the elimination of the fee will be permanent.