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Loan Quality Advisor FAQ

1. What is Loan Quality Advisor (LQA)?
2. Why would I want to use LQA in my business?
3. What are the advantages of using LQA?
4. Am I required to run all my loans through LQA before delivering them to Freddie Mac?
5. Is there a fee to use LQA?
6. How will LQA be accessed?
7. Will we have to make changes to our systems to access LQA?
8. Will I be able to submit a loan file through LQA if I cannot create a ULDD file through my loan origination system?
9. Is LQA the same type of tool as Loan Prospector?
10. Do I get representation and warranty relief with LQA if I use the LQA risk assessment?
11. When will LQA be available and how do I sign up for LQA?

1. What is Loan Quality Advisor (LQA)?

   LQA is our new a Web-based risk and loan eligibility assessment tool. Freddie Mac developed LQA to provide you with an automated way to help identify possible Freddie Mac loan eligibility issues – both pre- and post-closing.

   LQA offers the following services:

   • Loan Prospector Data Compare (available early summer 2013) – 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 (available early summer 2013) – provides a summary of Freddie Mac’s credit risk assessment for loans you originated outside of Loan Prospector.
   • Purchase Eligibility (available fourth quarter 2013) – identifies potential pre- and post-closing delivery errors related to data quality, charter compliance, and credit compliance.

2. Why would I want to use LQA in my business?

   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.)

3. What are the advantages of using LQA?

   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 determine whether correspondent lenders 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.

4. Am I required to run all my loans through LQA before delivering them to Freddie Mac?

   No. You are not required to use LQA on loan submissions. But, 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.

5. Is there a fee to use LQA?

   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.

6. How will LQA be accessed?

   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.

7. Will we have to make changes to our systems to access LQA?

   No. LQA will leverage the existing Uniform Loan Delivery Dataset (ULDD) for file submissions. This makes it easy for you to get started using LQA.

8. Will I be able to submit a loan file through LQA if I cannot create a ULDD file through my loan origination system?

   No. LQA can only accept 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.

9. Is LQA the same type of tool as Loan Prospector?

   No. Loan Prospector is an underwriting tool. LQA is a risk and eligibility assessment tool. LQA is a complement to Loan Prospector.

10. Do I get representation and warranty relief with LQA if I use the LQA risk assessment?

    No. Only Loan Prospector provides representation and warranty relief for loans with an Accept risk class.

    But, using LQA 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 Guide Bulletin 2012-18).

11. When will LQA be available and how do I sign up for LQA?

    LQA will be available for Freddie Mac Sellers in early summer 2013. We will be providing additional details on the sign-up and registration process soon.