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Loan Prospector February 10 Release

January 25, 2013

To help provide you with greater efficiencies in your loan manufacturing process, Loan Prospector® will be updated on February 10, 2013. This update supports our commitment to enhance our technologies, and helps provide you with more purchase certainty and confidence in the loans you deliver to Freddie Mac.

We are updating Loan Prospector to provide you with more detailed loan feedback based on information available on the credit report. These changes should enable you to identify issues earlier in your origination process and help avoid costly delays.

In addition, we are updating Loan Prospector feedback messages for verbal verification of employment (VOE) for employed borrowers and verification of existence of the business for self-employed borrowers.

The Loan Prospector February 10, 2013, release will include the following enhancements:

  • Add new feedback messages to align with specific underwriting and documentation requirements for information available on the credit report and a new feedback message to align with the occupant debt ratio requirements.
  • Update feedback messages to reflect requirement changes for verbal VOE for employed borrowers and verification of the existence of business for self-employed borrowers, as outlined in the December 14, 2012, Single-Family Seller/Servicer Guide (Guide) Bulletin 2012-28.
  • Update Loan Prospector functionality for mortgages with financed mortgage insurance (MI) premiums and non-occupant borrowers.

New Feedback Messages to Align with the Guide

Loan Prospector will be updated to return new feedback messages that align with specific underwriting and documentation requirements currently outlined in the Guide for credit report inquiries, including those relating to derogatory credit information, and authorized user accounts. Please note: these are not new requirement changes to the Guide. In addition, Loan Prospector will be updated to provide a new feedback message that aligns with the occupant debt ratio requirements outlined in the Guide. Review the new feedback messages to help you more quickly identify these requirements.

Verbal VOE and Verification of the Existence of Business Feedback Message Updates

With this release, Loan Prospector will be updated to reflect the changes outlined in Guide Bulletin 2012-28, permitting Sellers to obtain a verbal VOE or verification of the existence of business, as applicable after the Note Date, provided it is obtained prior to the Delivery Date of the loan. Beginning February 10, 2013, you will receive updated feedback messages, as applicable for all new submissions and resubmissions of conventional mortgages. Review these updated feedback messages.

Updating Loan Prospector Functionality

We are updating functionality for three existing scenarios in Loan Prospector to provide more certainty in your Loan Prospector results, and simplify your loan manufacturing process. On February 10, 2013, functionality for the following scenarios will be updated in Loan Prospector:

  • Financed MI Premium – Loan Prospector will be updated to align with the Guide, by revising the loan-to-value (LTV) calculation used to determine which MI coverage feedback messages is returned on conventional loans. Currently, Loan Prospector adds the financed MI premium amount to the base loan amount to arrive at the LTV ratio used to determine which  MI coverage feedback is returned. With this release, Loan Prospector will be updated to use the LTV ratio based on the base loan amount to determine which MI coverage feedback message is returned.  Please note: the LTV ratio returned on the Loan Prospector feedback certificate, in the Loan Information section, will continue to be calculated using the loan amount including financed MI. 
  • Non-Occupant Borrowers – Income Amount – Currently if you submit a loan to Loan Prospector with an occupant borrower and a non-occupant borrower, the occupying borrower must show an income amount of at least $1.00 – even if the occupying borrower is unemployed. Loan Prospector will be updated to allow an Occupant Borrower Income Amount of $0.
  • Non-Occupant Borrowers – Non Housing Debt Amount – Currently if you submit a loan to Loan Prospector with an occupant borrower and non-occupant borrower, the non-occupant borrower must show a non-housing debt of at least $1.00 – even if the non-occupant borrower does not have any non-housing debt. Loan Prospector will be updated to allow a non-occupant borrower non-housing debt of $0.

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