The mortgage giant claims that lenders that embrace automation have fewer loan defects and reduce loan origination time and costs than lenders with lower technology usage.
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Encompass, InterContinental Exchange’s digital mortgage lending platform, has been upgraded to provide deeper integration with mortgage giant Freddie Mac’s automated underwriting system, Loan Product Advisor (LPA).
Encompass now has access to feedback messages from loan product advisors. The message provides “actionable responses” when problems arise with debt-to-income ratios, loan-to-value ratios, and reserves, helping lenders “make faster, more informed decisions.” , to help you make more of your warnings work for you,” Freddie Mac announced Wednesday.
Encompass users will also receive feedback on whether their loans are eligible for employment representation and guarantee relief, and whether their loans are eligible for automated valuation and valuation alternatives.
tim bowler
“Encompass users can now seamlessly access Freddie Mac’s latest LPA products as part of their existing workflow,” Tim Bowler, president of ICE Mortgage Technology, said in a statement. “As always, the goal is to increase efficiency, reduce costs, and help lenders lend more qualified borrowers the homes they can afford.”
Technology reduces loan default rates
Lenders that leverage technology have lower loan default rates than their competitors. Source: Freddie Mac
Freddie Mac found that lenders that adopted its automated services saw a 40 percent reduction in loan defects, $1,700 in cost savings, and a seven-day reduction in loan origination time compared to lenders with lower technology usage rates. He pointed to a February 2023 study that found that
Kevin Kaufman
“Technology is enabling lenders to originate more loans that are eligible for sale to Freddie Mac without changing their workflows,” Kevin Kaufman, a Freddie Mac executive, said in a statement. “We will also provide lenders with more detailed information about purchase requirements and cost-saving options for first-time home buyers.”
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