Loan Quality Advisor FAQ
updated September 19, 2013
- What is Loan Quality Advisor (LQA)?
- Why would I want to use LQA in my business?
- What are the advantages of using LQA?
- What is Freddie Mac’s recommendation on how to use LQA?
- Am I required to run all my loans through LQA before delivering them to Freddie Mac?
- Is there a fee to use LQA?
- How will LQA be accessed?
- Is LQA the same type of tool as Loan Prospector?
- For loans assessed through Loan Prospector I receive representation and warranty relief, will I receive the same representation and warranty relief with LQA?
- Will we have to make changes to our systems to access LQA?
- What format do we need to submit loans to LQA?
- Is the ULDD file something that we create in order to use this product?
- Will I be able to submit a loan file through LQA if I cannot create a ULDD file through my loan origination system?
- I'm interested in LQA how do I get details to sign up for access?
- What type of training is available for LQA?
- Whom do I contact if I have questions about LQA?
- How do I reset my password?
- How can I change my PIN, last name, or telephone number on my user account?
- Can I submit multiple loans at one time to LQA?
- Does LQA provide real-time results?
- Can a loan be submitted multiple times throughout the loan manufacturing process in LQA?
- If I submit files with multiple loans will LQA results include all loans submitted?
- Can you export the results from LQA?
- Do I have to choose which service in LQA to run a loan through?
- I use LQA post close. If I need to make changes to the loans after an LQA evaluation can I resubmit the loan to Loan Prospector?
- Will submissions to LQA be a requirement for delivery to Freddie Mac?
- Can we upload loans from LQA to selling system?
- If a loan is assessed in Loan Prospector and changes are made to loan data in Loan Prospector just prior to close, do we need to still use LQA?
- How do we upload loans to LQA?
- Will my third-party originators have access to LQA?
- We now upload our loans automatically from a loan origination vendor’s product solution to Loan Prospector will we be able to do the same with LQA?
Loan Prospector Data Compare
- What data will LP Data Compare use?
- What data does LQA use to match the loan to the last Loan Prospector submission for the data compare?
LQA Risk Assessment
- Why would I use LQA Risk Assessment?
- What response will I receive from LQA Risk Assessment?
- Can LQA Risk Assessment be used to resubmit loans to Loan Prospector?
- If I receive the response, High Likelihood of Caution, can I still sell the loan to Freddie Mac?
- Do I get representation and warranty relief with LQA if I use the LQA Risk Assessment?
LQA is our new Web-based risk and loan eligibility assessment tool. Freddie Mac developed LQA to provide an automated way to help you identify possible Freddie Mac loan eligibility issues – both pre- and post-closing.
LQA offers the following services:
- Loan Prospector Data Compare – helps ensure that the loan delivery data and the date used in Loan Prospector submissions are consistent. This capability is complementary to Loan Prospector, not a replacement.
- Risk Assessment – provides a summary of Freddie Mac’s credit risk assessment for loans you originated outside of Loan Prospector.
- Purchase Eligibility (future release) – identifies potential pre- and post-closing delivery errors related to data quality, charter compliance, and credit compliance.
Visit our web page for more information on LQA.
LQA provides you with the ability to identify and resolve credit, data, and purchase eligibility issues before you deliver loans to Freddie Mac.
This will help you meet our purchase requirements and as a result may provide a better opportunity for you to receive relief under the new representation and warranty framework that became effective January 1, 2013. (Refer to Single-Family Seller/Servicer Guide Bulletin 2012-18.)
The benefits of evaluating loans through LQA are:
- Provides the opportunity to make changes to comply with the Freddie Mac Single-Family Seller/Servicer Guide (Guide) requirements before the loan closes.
- Helps lenders determine whether they have manufactured a loan according to Freddie Mac’s Guide requirements.
- Allows an early view of loan delivery issues and reduces the time required to fund at loan delivery.
- Enables monitoring of loan manufacturing defect trends and provides the ability to proactively resolve them.
We recommend you use Loan Prospector for your loan origination, and use LQA's LP Data Compare service prior to closing the loan to ensure no changes have occurred that would impact your Loan Prospector Accept risk class and corresponding relief of representation and warranties. Together these tools can help you increase confidence in the eligibility of loans you sell to Freddie Mac.
No. You are not required to use LQA on loan submissions. However, we encourage you to use it to assist you in identifying loan eligibility issues before loans are sold to Freddie Mac. Using LQA during your loan manufacturing process will provide you with greater certainty that the loans you sell to Freddie Mac meet our requirements.
No. There is currently no fee to use LQA. To maximize your value and benefits of doing business with Freddie Mac, we are initially offering the LQA tool free of charge to help remove barriers of adoption and increase your alignment with our suite of technology tools.
LQA will be available through a Web browser access method initially. This access will reduce your implementation timeframe and require minimal resources to get started. We are developing a LQA system-to-system access method and will provide more details at a later date.
No, Loan Prospector is an automated underwriting system. LQA is a risk and eligibility assessment tool. LQA is a complement to Loan Prospector.
Loan Prospector provides representation and warranty relief for loans with an Accept risk class LQA complements Loan Prospector, and can help you ensure no changes to the loan have occurred that would impact your loans Loan Prospector accept risk class and corresponding representation and warranty relief made possible through the use of Loan Prospector at loan purchase.
LQA is accessed through a web browser, so no system changes are required for the browser access method. This makes it easy for you to get started using LQA.
Loans must be submitted in the Uniform Loan Delivery Data (ULDD) file format.
Yes, LQA will leverage the same Freddie Mac ULDD format that is currently used to deliver loans in the selling system. This makes it easy for you to get started using LQA.
LQA can only accept Freddie Mac ULDD files. If you do not have the ability to create a ULDD file, please contact your organization’s system administrator or your loan origination system vendor.
If you are ready to sign-up to use LQA, you should first check out the Freddie Mac Learning Center at FreddieMac.com/learn/lqa/index.html to review an overview of the LQA sign up process then contact your Freddie Mac Representative or (800) FREDDIE.
There are several training resources available for your use. Refer to the Learning Center’s LQA webpage at FreddieMac.com/learn/lqa/index.html for references and training sessions that will help you quickly get started with LQA. Check back often to see what new resources we have to offer. FreddieMac.com/learn/lqa/index.html
Contact your Freddie Mac Representative or 800-FREDDIE.
Like all our other systems you should contact Freddie Mac customer service at 800-FREDDIE.
You will need to send a new LQA User Setup form requesting to modify the user information located on the form such as a new pin, last name, telephone number, etc. If you have questions contact Freddie Mac customer service at (800) FREDDIE.
Yes. LQA will accept multiple loans or a single loan via a batch file that is uploaded and submitted in the ULDD format. Please note LQA does not support direct data entry into the tool.
Yes. LQA is designed to process the evaluation while you wait. You may choose the convenient email notification feature to alert you when the results are available.
Yes. A loan can submitted at any time during the loan manufacturing process, especially if the loan requires a second look and subsequent changes have been made. The points in the process where LQA may be most helpful to you are:
- Immediately prior to closing the loan.
- As a quality control check after closing and before delivery.
- Prior to funding correspondent loans.
Yes. LQA will return a response for each loan submitted, even if the loan fails completeness checks and cannot be processed. In the case that one loan in a batch fails to process, the rest of the loans in that batch will continue through the evaluation and results will be returned. Additionally, you can apply filters to view only the loans with discrepancies, if desired, which may help streamline your process and provide added efficiencies.
Yes. The Export Results function allows you to export the batch file evaluation result to an XML file format. There is also the capability to create a print-friendly version of the Summary of Batch Results and Loan Evaluation allowing you to save the results as a PDF using a PDF writer. In a future release, LQA functionality will be enhanced to provide evaluation results in Excel and CSV formats.
LQA will automatically evaluate each loan using the service specific to the data submitted for that loan. If the LP AUS Key Number was included in the ULDD file submitted to LQA, LQA will evaluate the loan through the LP Data Compare service. If the LP AUS Key Number is not included in the ULDD file submitted, LQA will evaluate the loan through the Risk Assessment service.
Yes. The specific requirements for resubmitting a loan post-closing to Loan Prospector are located in Section 2.2.1(k) of the Guide. Resubmitting the loan to LQA is not required; however, you may want to resubmit to LQA if the loan requires a second look and subsequent changes have been made.
There is no requirement to submit to LQA in order to deliver a loan to Freddie Mac at this time. However, we encourage you to use LQA to assist you in identifying loan eligibility issues before loans are sold to Freddie Mac. Using LQA during your loan manufacturing process will provide you with greater certainty that the loans you sell to Freddie Mac meet our requirements.
No. You will continue to use your existing process for uploading loans to the selling system.
You are not required to use LQA on loan submissions. However, we encourage you to use LQA to assist in identifying loan eligibility issues before loans are sold to Freddie Mac. Using LQA during your loan manufacturing process will provide you with greater certainty that the loans you sell to Freddie Mac meet our requirements.
For assistance to upload loans to LQA contact your Freddie Mac Representative or (800) FREDDIE for assistance with uploading.
Only approved Freddie Mac Seller/Servicers are eligible to use LQA at this time.
Not at this time. LQA is currently available through a Web browser access method initially. We will be providing a LQA system-to-system access method in the future and we will provide lenders with more details.
Loan Prospector Data Compare
LQA will compare approximately 25 data elements from the submitted ULDD file with corresponding data elements from Loan Prospector’s last complete submission. The comparison of these important data elements in LQA is to determine if the loan data has changed between the last submission in Loan Prospector and the intended loan delivery data.
The LP Data Compare functionality will match the Social Security numbers for the loan, and the corresponding LP AUS Key Number.
LQA Risk Assessment
If you do not currently use Loan Prospector to originate and underwrite loans, you can use LQA to get a summary level indication of Freddie Mac’s view of the credit risk and associated quality of the loan.
When non-Loan Prospector loans are submitted to LQA, the Risk Assessment service will return one of two responses – High Likelihood of Accept or High Likelihood of Caution. For any loan that receives the High Likelihood of Caution message, additional risk comments will be included with the results.
No. If the loan has been previously submitted to Loan Prospector, the LQA LP Data Compare service will be used to check if the data matches the last complete Loan Prospector submission. If changes are needed to a Loan Prospector submission, you must resubmit the loan directly to Loan Prospector.
Yes. LQA is informational only and does not specify requirements for the sale of the loan. High Likelihood risk assessment results are intended to provide Freddie Mac’s risk view of the loan. It does not impact purchase eligibility.
No. Only Loan Prospector provides representation and warranty relief for loans with an Accept risk class.
However, using LQA will help you reduce repurchase risk and as a result may provide a better opportunity for you to receive relief under the new representation and warranty framework that became effective January 1, 2013. (Refer to Single-Family Seller/Servicer Guide Bulletin 2012-18.)