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A New World for Community Based Lenders

VP Christina BoyleOne reason community based lenders are known for delivering quality service is because they are deeply rooted in the markets they serve and often know their customers on a first-name basis. Maintaining this legacy in the new world we live in requires community based lenders to adapt to new regulations, technologies, and customer demands despite having smaller staff and fewer resources than their bigger competitors.

Freddie Mac is committed, focused, and working hard to help the community based lenders we do business with meet these challenges by providing:

  • Tools, training, and dedicated staff support to provide greater certainty that loans delivered to Freddie Mac stay delivered.
  • Multiple execution options to sell to Freddie Mac, with quick (24-hour) funding.
  • Consistent pricing for all lenders regardless of size.
  • Dedicated resources to address their specific needs.

Let’s take these one at a time:

Building Quality Loans:  Because community based lenders know their markets and customers closely, they have a legacy of delivering high-quality loans. Freddie Mac has created tools for monitoring and continuously improving their loan manufacturing processes plus training programs and support teams dedicated to helping them continue their reputation for quality in the new world.

For example, today originators can start their quality controls process with Loan Quality Advisor® shortly after they start underwriting the loan with Loan Prospector®, our automated underwriting service. Loan Prospector evaluates risk and eligibility, but Loan Quality Advisor automates the process of monitoring the file as it moves through the entire production process for alignment with Freddie Mac requirements. The result is a better way to identify and fix underwriting issues, fine tune the loan manufacturing process, and take advantage of our new representation and warranty model. We call this Greater Purchase Certainty.

Multiple Executions, Quick Funding: Community based lenders have the option of delivering loans to Freddie Mac and retaining the servicing, to keep direct contact with customers, or selling the loans servicing released. Every community based lender is different and the answer depends on what will help them individually realize the most profit from their servicing asset.

Similarly, we fund loans sold for cash within 24 hours, whether lenders sell in bulk, or one at a time, Mandatory or Best Efforts. Our goal is to take the guesswork out of liquidity so community based lenders can provide the reliable, competitive service customers want.

Consistent Pricing: We’ve worked to level the playing field between community based originators who sell through our cash window – and other originators who swap loans for Freddie Mac securities. Consistent pricing at the back end means community based lenders can be more competitive with new and established customers.

Dedicated Resources:  Mindful that community based lenders wear many hats, we are adding resources to provide answers, training, and support on topics ranging from Freddie Mac policies and technology upgrades to regulatory changes. Here are just a few examples of how we’re closing the information gap between community based lenders and the rest of the industry:

  • Live Freddie Mac Campus training events around the country, lender conference calls, e-mail alerts, and webinars designed for community lender staffs. Our Fall Customer Symposium also provides a regular opportunity for us to meet face to face with lenders and discuss the issues most important to them.
  • Consultative Sales support the draws on resources from across Freddie Mac to help community based lenders meet the challenges they face.
  • Our 1-800-FREDDIE team of dedicated, highly trained customer representatives are focused on providing quick answers to questions about delivery, underwriting, servicing, and other issues. Today, nine out of ten community lender calls to 1-800-FREDDIE are answered within one minute and nine out of ten issues are resolved on the first call.

One more point: information is a two-way street. Our sales staff meets regularly with customers through our alliances with the American Bankers Association, Independent Community Bankers of America, Credit Union National Association, and Capital Markets Cooperative. In addition, through our Community Lender and Credit Union Advisory Boards we solicit feedback and guidance on potential changes we may be considering. The goal is to work with these groups to provide more information they can use to maintain quality, spot trends, and adapt to change.

The world is changing quickly. Freddie Mac continues to provide the tools and support community based lenders need to continue being the important partners their communities need and expect.


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