Did You Know that it used to take up to two years’ worth of documentation and two months wait time to find out if your mortgage would be approved? That was before the 1995 debut of the first automated underwriting service for residential mortgages – Freddie Mac's Loan Prospector® (LP). Today, we analyze an average 40 submissions a minute with LP – that's nearly one loan per second!
For nearly 20 years now, lenders and brokers have been able to enter credit, loan and property information into a computer or web site linked to LP and receive an assessment of a loan in minutes rather than days. And borrowers are only providing what’s needed for a particular loan, greatly reducing the amount of documentation.
Automated underwriting also nearly eliminates human bias, as assessments are based on algorithms. However, there's still a human touch – ultimately it's the underwriter who must review the documentation and approve the loan.
Read other Did You Know? posts in our series to celebrate National Homeownership Month.
Have a comment or question about this post? Email us to let us know what's on your mind.