What is Freddie Mac’s Loan Prospector? - KamilTaylan.blog
26 April 2022 3:55

What is Freddie Mac’s Loan Prospector?

Freddie Mac uses Loan Prospector to manage the credit risk of the home loans the company purchases. Loan Prospector contains statistical models that evaluate a borrower’s credit, capacity and collateral, and provides quick assessments based on the historical performance of home loans with similar characteristics.

What is a loan Prospector?

Loan Prospector is an automated underwriting service that can provide the following: A quick decision concerning a loan’s eligibility for sale to Freddie Mac. A determination of the overall loan risks. An evaluation of the borrower’s credit and collateral to help complete the loan application underwriting.

What is Freddie Mac’s automated underwriting system called?

Loan Prospector®

Loan Product Advisor is our enhanced automated underwriting system. It helps simplify your origination processes and provides you with greater certainty that your loans meet Freddie Mac eligibility requirements. Why the name change from Loan Prospector® to Loan Product Advisor?

Does Freddie Mac give loans?

Does Freddie Mac make loans to consumers? No. Freddie Mac does not make loans directly to homebuyers. Our primary business is to purchase loans from lenders to replenish their supply of funds so that they can make more mortgage loans to other borrowers.

What are the benefits of a Freddie Mac loan?

Flexible home loans backed by Freddie Mac: the Home Possible mortgage

  • Only 3% down required.
  • You can qualify for the program even without a credit score.
  • Up to 30% of the borrower’s income can come from rent, perhaps from a boarder or roommate.
  • Investors are welcome.
  • A lender can provide a gift to the borrower.

What is FNMA and Fhlmc?

Fannie Mae and Freddie Mac are federally backed home mortgage companies created by the United States Congress. Neither institution originates or services its own mortgages. Instead, they buy and guarantee mortgages issued through lenders in the secondary mortgage market.

What is the difference between Freddie Mac and Fannie Mae?

The primary difference between Freddie Mac and Fannie Mae is where they source their mortgages from. Fannie Mae buys mortgages from larger, commercial banks, while Freddie Mac buys them from much smaller banks.

Is LP Fannie or Freddie?

Fannie Mae uses the automated underwriting system called Desktop Underwriter or DU, while Freddie Mac uses the AUS called Loan Prospector or LP. Both of these systems do similar functions. They are the systems that lenders submit a home buyer’s information to for automatic approval.

What happens during automated underwriting?

Automated underwriting systems (AUS) analyze a client’s financial information (such as credit score and income) in addition to the overall value of the property they are looking to purchase (usually determined by an appraiser).

What does it mean to underwrite a loan?

The Bottom Line. Underwriting simply means that your lender verifies your income, assets, debt and property details in order to issue final approval for your loan. An underwriter is a financial expert who takes a look at your finances and assesses how much risk a lender will take on if they decide to give you a loan.

What is the difference between FHA and Freddie Mac?

Perhaps the most notable differences between a Freddie Mac Home Possible Loan and an FHA Loan are the upfront funding fees and mortgage insurance policies. A Freddie Mac Home Possible Loan requires neither an upfront funding fee nor mortgage insurance.

Is Freddie Mac conventional or FHA?

Conventional loans are also called conforming loans because they conform to Fannie Mae and Freddie Mac standards. Fannie Mae and Freddie Mac are government-created enterprises that buy mortgages from lenders and hold the mortgages or turn them into mortgage-backed securities.

Is Freddie Mac a FHA loan?

Frequently asked questions about Fannie Mae and Freddie Mac

Is Fannie Mae the FHA? No. The Federal Housing Administration is a government agency that insures loans made by lenders to borrowers with low to moderate incomes.

What is the minimum credit score for a Freddie Mac loan?

620

Credit Score for Fannie Mae and Freddie Mac
Fannie /Freddie loans require a minimum FICO credit score of 620 to qualify, but the approval process for applicants with credit scores between 620 and 660 may take longer than higher scores.

Is my mortgage backed by Fannie or Freddie?

You may contact your servicer (often your bank or lender) to verify that your mortgage loan is owned or guaranteed by Fannie Mae or Freddie Mac, or you may verify it yourself by accessing the Making Home Affordable website.

How do I qualify for a Freddie Mac mortgage?

Qualifying for HomeOne Freddie Mac 97 percent financing

  1. At least one borrower must be a first-time homebuyer.
  2. The property must be a one-unit primary residence including single-family residences, townhomes, and condos.
  3. You need at least 3 percent for your down payment.
  4. Homebuyer education is required.

Who is eligible for HAMP?

In order to qualify, mortgagors needed to make more than 31% of their gross income on their monthly payments. Property requirements were also enforced—they had to pass the net present value (NPV) test, along with other eligibility standards.

What type of loans does Freddie Mac purchase?

Freddie Mac buys home mortgages, primarily from smaller banks and savings and loans. In doing so, Freddie Mac keeps its lender network liquid, so it can keep making loans. This has proven key to keeping the mortgage industry in continuous operation.

Does Freddie Mac require homebuyer education?

Do all Home Possible borrowers need to take a homeownership education course? No. Homeownership education is required only for a purchase mortgage when all borrowers are first-time homebuyers or if the credit reputation for all borrowers is established using only Noncredit Payment References.

Does Freddie Mac allow boarder income?

Fannie Mae and Freddie Mac now count boarder income

Mortgage programs by Fannie Mae and Freddie Mac — the agencies that back most mortgage loans originated in the United States — now allow mortgage lenders to count boarder income when determining which borrowers qualify for a loan.

How long is Freddie Mac course?

How long will it take consumers to complete the CreditSmart Homebuyer U course? Users can anticipate completing the entire course within three hours but can return anytime to complete the course or review what they’ve learned.

Does Freddie allow boarder income?

Freddie Mac’s Home Possible® Mortgage does not count non-borrower income at all. But it does count boarder income. So if you have been living with someone for at least a year, and he or she has been paying you rent, you can count this as income.

Does Freddie Mac require a rent free letter?

A rent-free letter is required if the borrower lives rent free.

Does Freddie Mac requirements reserve for investment property?

The Seller must verify reserves of eight months of the monthly payment (as described in Section 5501.2(a)) on each additional second home and/or 1- to 4-unit Investment Property that is financed and on which the Borrower is obligated.

Are boarders classed as income?

You may need to pay tax on rental income you receive from private boarders or home-stay students. If your income from boarders or home-stay students is higher than your total costs you need to pay tax on the difference.

How many borders can you have before it affects your benefit?

How it works. You can have 2 boarders and it won’t affect your benefit. If you have 3 or more boarders or run a boarding house or homestay business, this will affect your benefit.

Can a family member be a boarder?

If a person is living in a house or flat with the landlord / homeowner, or their family member, they will generally be a boarder and not a tenant (s 5(1)(n) RTA).