About This Report
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Chapter 1: Improving the World’s Best Housing Finance System
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Loan Prospector represents Freddie Mac’s continuing drive to reduce mortgage costs and extend the benefits of the secondary market.

Chapter 2: Reducing Frustration, Delays and Costs
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Loan Prospector shrinks the mortgage approval process from weeks to minutes, saving borrowers time and money.

Chapter 3: Looking Inside Loan Prospector
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Loan Prospector provides a comprehensive and accurate evaluation of borrower risk.

Chapter 4: Leveling the Playing Field
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Loan Prospector is blind to differences in race and ethnicity, promoting fairer mortgage lending decisions.

Chapter 5: Expanding Markets
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Loan Prospector qualifies borrowers previously excluded from the mortgage market or relegated to paying higher rates for subprime loans

Chapter 6: Using Credit-Bureau Scores
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The use of credit-bureau scores provides a bridge between manual and automated underwriting.

Chapter 7: Keeping the Promise
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Loan Prospector is making great strides—pilot programs and other initiatives demonstrate its enormous potential.

Glossary
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Data Sources
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On March 21, 1996, Leland C. Brendsel, Chairman and Chief Executive Officer of Freddie Mac, testified before the Senate Banking Committee’s Subcommittee on HUD Oversight. The hearing explored the effects of the 1992 Federal Housing Enterprises Safety and Soundness Act on Freddie Mac and Fannie Mae. In his testimony, Mr. Brendsel described some of the extraordinary benefits that automated underwriting is bringing to home mortgage lending.

In response, Senator Carol Moseley-Braun (D-IL), ranking subcommittee member, asked Freddie Mac to report on automated underwriting and credit scoring and their impacts on the wide range of American families who borrow money to purchase homes.

This report tells the story of Freddie Mac’s automated underwriting service, Loan Prospector, based on the experience of real families and the performance of mortgages Freddie Mac has purchased.

Freddie Mac is a shareholder-owned corporation whose people are dedicated to improving the quality of life by making the American dream of decent, accessible housing a reality.