Loan Quality Advisor FAQ
Update November 19, 2014
- What is Loan Quality Advisor (LQA)?
- How can LQA help my business?
- 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 is LQA accessed?
- 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?
- Can I submit a loan file through LQA if I cannot create a ULDD file?
- 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 can I change my user account information?
- 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 do LQA results include all loans submitted?
- Can you export the results from LQA?
- How does LQA determine what services 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?
- Are submissions to LQA 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 system (LOS) vendor's product solution to Loan Prospector. Am I able to do the same with LQA?
Loan Prospector Data Compare
- What data does 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 Purchase Eligibility
- What loans are evaluated through the Purchase Eligibility service?
- What rules are used in the Purchase Eligibility service?
- Will I see similar results as with the other services?
- Does Purchase Eligibility provide specific message codes?
- Will the LQA results I receive match what I receive in the selling system?
- My system has been updated to reflect ULDD Phase 2 data points; can I still submit the loans to LQA? – New
- When will LQA be able receive the ULDD Phase 2? – New
- Will LQA still accept the ULDD Phase 1 and 2 ULDD data points? – New
- Will my negotiated terms be supported?
- Can I receive results if I don't submit a complete ULDD?
LQA System-to-System Integration
- I use a vendor to access LQA. How can I use system-to-system?
- Where can I access the LQA system-to-system specifications?
- When will LQA system-to-system access be available?
- How does LQA system-to-system capability work?
- What are the differences in the LQA S2S and browser access methods?
- How do I get started with LQA S2S?
- How can I find out if my LOS vendor is building or is set up to use LQA S2S?
- How long will it take for LOS vendors to build the LQA S2S interface?
- Can I still use LQA if my LOS vendor is not ready yet?
LQA Merged Credit
- How will obtaining merged credit work through the LQA Risk Assessment service?
- Which credit reporting companies (CRCs) can support merged credit re-issues?
- Can LQA support merged credit report re-issues when the original credit report was ordered from a technical affiliate?
- What happens if the merged credit information is provided, but LQA is unable to process the merged credit re-issue request?
- In what scenarios will LQA use credit infiles instead of merged credit?
- Will a Risk Assessment evaluation be completed if merged credit cannot be obtained?
- Will I be able to obtain a new merged credit report in LQA?
- Will different results be displayed in Risk Assessment when merged credit is used in the evaluation vs. when credit infiles are used?
- Do I need to follow a different process with open loan submissions in Risk Assessment to benefit from merged credit?
- Are there new CRC set up requirements for merged credit?
- Are there data fields required for ULDD to process merged credit?
- What is a Merged Credit Reference Number?
- Does the export file change based on merged credit?
Loan Quality AdvisorSM (LQA) is a risk and eligibility assessment tool that evaluates loan data to help lenders determine if a loan is eligible for sale to Freddie Mac. LQA provides you with information about Freddie Mac's risk assessment and eligibility requirements at the point(s) in process where it is most useful to you.
LQA offers the following services:
- Loan Prospector Data Compare – Ensures the Loan Prospector® result is still valid by providing a comparison view of current loan data submitted to LQA against loan data used in the last Loan Prospector submission.
- Risk Assessment – Provides Freddie Mac's view of risk on non-Loan Prospector originated loans.
- Purchase Eligibility – Provides an early view of comprehensive purchase edits by running the same purchase eligibility rules run in the selling system at loan delivery.
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.
Evaluating loans through LQA:
- Validates that your loans are consistent with Freddie Mac requirements.
- Determines whether third parties have originated a loan according to Freddie Mac eligibility requirements.
- Gives an early view of loan delivery issues.
- Reduces the time it takes to fund at loan delivery.
- Helps identify loan production defect trends and proactively resolve them.
- Can be used anywhere in the loan origination process – from underwriting to loan delivery.
We recommend using Loan Prospector for your loan origination, and using LQA services to help validate a Freddie Mac eligible loan has been originated. While LQA can be leveraged multiple places within the loan creation process, following are some of the ways we have seen it implemented by lenders to date:
- LP Data Compare service just prior to closing the loan to ensure no changes have occurred that would impact the Loan Prospector Accept risk class and corresponding relief of representation and warranties.
- Risk Assessment is for loans originated outside of Loan Prospector. Use this service prior to closing the loan to get a summary of Freddie Mac’s credit risk assessment and/or prior to making a best execution decision.
- Purchase Eligibility runs data quality and purchase eligibility rules exactly like those run at loan delivery, enabling you to resolve potential purchase eligibility issues prior to delivery. This is valuable right before loan closing, when the full Uniform Loan Delivery Data (ULDD) file is likely close to complete, or as part of a post-closing quality control process in anticipation of loan delivery.
- If purchasing from third party originators, all services can also be beneficial in understanding the eligibility of the loan prior to making a final commitment on that loan.
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 provides you with greater certainty that the loans you sell to Freddie Mac meet our requirements.
No. There is currently no fee to use LQA.
LQA is currently available through a Web browser access method that enables upload of a batch file containing one to five thousand loans leveraging the ULDD file format. This access reduces your implementation timeframe and requires minimal resources to get started. In addition, we are currently developing an LQA system-to-system interface that is planned for implementation in third quarter of 2014. A development specification for this integration approach was made available in January to loan origination (LOS) vendors. If you are interested in this integration option, contact your vendor to determine their development plans or contact your Freddie Mac representative.
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 LP Accept risk class and corresponding representation and warranty relief. LQA feedback is informational only.
LQA is accessed through a web browser, so no system changes are required. This makes it easy for you to get started using LQA. If you already access either Loan Prospector or the selling system, you can re-use your user ID and password to access LQA. You may need to make system changes if you plan to take advantage of the LQA system-to-system interface option that is currently in development and will be available in third quarter 2014.
Loans must be submitted in the ULDD file format.
Yes, LQA leverages 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 only accepts ULDD files. If you do not have the ability to create a ULDD file, please contact your organization’s system administrator or your LOS vendor for assistance.
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 – from self-guided tutorials to instructor led webinars. 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.
To reset your password and change your user account information, you'll need to first create your user profile. Here's how:
- Go to the Access Manager for e-Business page to log in.
- Enter your user ID and password.
- Provide or validate basic contact information, including your name, email address, and phone number.
- Establish three security questions for user verification.
- Then you will be able to update your user account information.
Yes. LQA accepts multiple loans or a single loan via a batch file that is uploaded and submitted in the ULDD format. You can submit up to 5,000 loans per batch. Please note LQA does not support direct data entry into the tool.
Yes. LQA is designed to process the evaluation within minutes, depending on size of the batch file. You may choose the convenient email notification feature to alert you when the results are available if you prefer not to wait. This may be a helpful feature if evaluating very large batches.
Yes. A loan can be 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 returns 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 continue through the evaluation and results are returned. Additionally, once you receive your batch level results, you can apply filters to view only the loans with errors, if desired, which may help streamline your process and provide added efficiencies.
Yes. The Export Results function allows you to export batch file evaluation results. You can export results in several formats including excel, CSV, and XML. There is also the capability to create a print-friendly version of the Summary of Batch Results and Loan Level Evaluation Results allowing you to save the results as a PDF using a PDF writer.
LQA automatically evaluates each loan using the service specific to the data submitted for that loan. Loan Prospector loans are evaluated through LQA's LP Data Compare service. Non-Loan Prospector loans are evaluated through the Risk Assessment service. All loans are evaluated through the Purchase Eligibility service.
Yes. The specific requirements for resubmitting a loan post-closing to Loan Prospector are located in Section 2.2.1(k) of the Single-Family Seller/Servicer Guide (Guide). Resubmitting the loan to LQA is not required; however, you may want to resubmit to LQA if subsequent changes are 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 evaluate the loan through LQA’s LP Data Compare service to help maintain the loan's LP Accept risk class, so that the representation and warranty relief provided by Loan Prospector can remain valid at loan purchase.
You should refer to the Chapter 2 Evaluating a File in the LQA Users Guide.
Only approved Freddie Mac Seller/Servicers are eligible to use LQA at this time.
We are introducing an LQA system-to-system interface this third quarter 2014. Contact your LOS vendor to determine when this capability will be available.
Loan Prospector Data Compare
LQA compares approximately 20 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. Identifying these data discrepancies prior to loan delivery gives you time to take action to ensure the accuracy of the loan’s data and the corresponding Loan Prospector result. In addition, LP Data Compare applies other Loan Prospector eligibility checks as part of its evaluation. For example, a check is done to ensure the credit is within 120 days of the Note Date.
LQA matches the Social Security Numbers for the loan, and the corresponding LP AUS Key Number to validate the information matches an existing Loan Prospector loan.
LQA Risk Assessment
If you do not currently use Loan Prospector to originate and underwrite loans, you can use LQA’s Risk Assessment service to get Freddie Mac's view of the credit risk.
When non-Loan Prospector loans are submitted to LQA, the Risk Assessment service returns 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 may be included with the results.
No. If the loan has been previously submitted to Loan Prospector, the LQA LP Data Compare service is 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. High Likelihood of Caution 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 helps 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 Guide Bulletin 2012-18.)
LQA Purchase Eligibility
All loans submitted to LQA are evaluated through the Purchase Eligibility service.
The Purchase Eligibility service evaluates loans using the same data quality, charter compliance, and credit compliance rules used today in the selling system.
Yes, you receive the same evaluation results that are consistent with the other LQA services – Red, Yellow, or Green color indicators that can be used to quickly identify critical errors. Results can be sorted and exported by the color indicator.
The Purchase Eligibility feedback is consistent with the category names and messages you receive in the selling system. Purchase Eligibility results include unique category codes to help drive workflow.
Yes, LQA uses the same ULDD file format you use when you deliver loans in the selling system and the same rule sets are applied in both systems. The Purchase Eligibility results are informational and should be used to indicate potential delivery errors.
Yes, LQA was updated with the ability to receive the ULDD Phase 2 data points at the same time the selling system was updated with the ULDD Phase 2 requirements on May 19, 2014. These updates were made at the same time to eliminate the need for you to support multiple file formats.
On May 19, LQA and the selling system were updated with the ULDD Phase 2 requirements.
Yes, LQA will accept both sets of data points. For more details on ULDD.
Yes. LQA supports customer specific terms within the Purchase Eligibility service consistent with how they are deployed in the selling system.
If you want to run LQA earlier in your process, your ULDD file may not be complete; however, the Purchase Eligibility service still evaluates your loans using the data you submitted. Please note the results Purchase Eligibility generates are based on the completeness of the data in the file you provide at the time of your LQA submission. You may resubmit an updated file to LQA at any point in your origination process.
LQA System-to-System Integration
Contact your LOS vendor for the timing of when the LQA system interface will be available for your system.
Contact your Freddie Mac representative or 800-FREDDIE for more information.
We currently have a Fixed Response customer test environment (CTE) available for your use. The CTE allows you to test your connectivity to LQA and provides fixed responses based on the test cases you submit, which confirms you are able to connect and receive a response from LQA. The full system-to-system functionality will be available third quarter 2014.
The LQA system-to-system (S2S) interface provides an automated way to submit loans and receive feedback directly from your loan origination or other desktop system.
The LQA S2S interface provides access to the same services, functionality, and results as the LQA browser access method, including submitting single-loan or multi-loan (up to 5,000) batch files.
Contact your loan origination system (LOS) vendor or a vendor that has committed to building a LQA S2S interface. If you have a custom build system, contact your Customer Management Operations and Technology Manager for detailed specifications.
To find out if your vendor is set up to use LQA S2S, visit our growing list of vendors who have committed to building the interface.
Contact your LOS vendor about their timeline for building the interface.
Yes. You have the ability to use LQA through the browser access method. If you have not done so yet, refer to the Freddie Mac Learning Center for an introduction and overview of LQA process and then contact your Customer Management Operations and Technology Manager or Customer Support (800-FREDDIE) to get signed up.
LQA Merged Credit
The Risk Assessment service will attempt to obtain a copy of the merged credit report used during origination for the risk evaluation if the related merged credit information is provided in Uniform Loan Delivery Dataset (ULDD) Phase 2.
LQA is obtaining copies of merged credit reports from:
- CBC Innovis.
- Corelogic CREDCO – Credstar.
- Equifax Mortgage Solutions.
- Kroll Factual Data Corp.
LQA cannot support re-issues for merged credit reports originally ordered from technical affiliates at this time.
There may be scenarios where LQA is unable to obtain a copy of the merged credit report. If this is occurs, in some cases, we would not be able to perform a Risk Assessment evaluation.
LQA will obtain credit infiles in Risk Assessment in the following scenarios:
- ULDD Phase 1 data file is submitted.
- Merged credit is not identified as the credit source.
- A CRC, other than the four identified above, is submitted.
- The loan fails Risk Assessment data quality checks.
If merged credit is identified as the credit source but a copy of the merged credit report is not obtained from the CRC, a Risk Assessment evaluation may still occur using credit infiles. When merged credit is not identified as the credit source, LQA will continue to use credit infiles in Risk Assessment. See Question 4 for scenarios that may pertain.
No. LQA will use a copy of the original merged credit report. Customers will not be able to order new merged credit reports in LQA. There is no additional fee when merged credit is obtained in LQA.
No. The Risk Assessment results will look the same, however there are new Risk Assessment messages that are specific to merged credit re-issues. These messages can be viewed in the LQA message matrix.
No. There is no additional set up required.
Yes. You must provide the following data in the ULDD file submitted to LQA.
Sort ID Data Point Enumerations 583 Credit Repository Source Type Merged Data 591.1 Credit Score Provider Name 1000 = CBC Innovis
5000 = Equifax Mortgage Solutions
6000 = Kroll Factual Data
8000 = Corelogic/CREDCO – Credstar
580 Credit Report Identifier Merged Credit Reference Number assigned to the borrower(s) merged credit report
The Merged Credit Reference Number (MCRN) is the unique credit report identifier assigned by each CRC when a merged credit report is originally ordered.
No. The export file does not change if a copy of the merged credit report is used in the Risk Assessment evaluation.