Enhanced Loan Prospector Usability Coming
April 16, 2014
We're working hard to improve Loan Prospector's overall usability and feedback messages. The next set of enhancements goes live on June 22, and will increase the efficiency of the tool and provide additional informational feedback.
We're reducing the number of steps you need to take when entering data to receive an assessment. And, we'll start highlighting data inconsistencies that could result in a repurchase if not resolved.
All of the changes we’re making are part of our series of Loan Prospector® enhancements designed to improve usability, and help provide you with greater purchase certainty in the loans you sell to us.
Specifically, here's what's changing on June 22:
|Loan Prospector Category||What's Changing:|
|Income Losses||Loan Prospector will accept submissions with negative income at the borrower level – for example from self-employed borrowers. This means you no longer need to enter a borrower's losses as modified income for a different borrower.
This change helps with accurate reporting of borrower income and improved borrower-specific income messaging from Loan Prospector.
|Assets||Loan Prospector will accept submissions with no reported assets – for example, if the asset information wasn't provided on the loan application.
This change allows the reported assets to be consistent with the loan application. Please note: you are responsible for ensuring the Single-Family Seller/Servicer Guide (Guide) requirements are adhered to, such as verifying sufficient funds for closing, as applicable.
|No Cash-Out||Loan Prospector will accept submission of no cash-out refinances with cash-out amounts greater than zero. If the cash-out amount exceeds the Guide requirement that allows for a nominal cash-out amount (lesser of $2,000 or 2% of the loan amount), a feedback message will be returned that the Guide requirement hasn't been met.
These changes allow additional Guide-compliant loans to be assessed in Loan Prospector.
|Debt-to-Income (DTI) and Loan-to-Value (LTV) Data Checks||Loan Prospector will highlight data inconsistencies that may impact DTI and LTV ratios. Feedback messages will be provided if Homeowner Association dues aren't entered when expected for the following property types: planned unit developments (PUDs), condominiums, or cooperative share mortgages; or when there is a balance for subordinate financing but no related housing expense (or vice-versa).
The feedback message alerts you to data inconsistencies, giving you the opportunity to take another look at the data.
|Financed Mortgage Insurance (MI)||Loan Prospector will provide a new feedback message for loans with financed MI.
The message will provide clarity on how Freddie Mac calculates LTV when there is financed MI on the loan.
|Adjustable Rate Mortgage (ARM)||Loan Prospector will provide a feedback message that highlights the subject property ARM qualifying principal, interest, taxes and insurance (PITI) used for DTI calculations for all mortgages. We are also revising an existing feedback message to remove the two-digit rounding feature on ARM qualifying rates.
This change expands the display of the ARM qualifying rate to three decimal places for ARMs with an initial adjustment period of five years or less.
Reminder – Reset Your Online Password Today
You can now reset your passwords online for Single-Family business applications. To take advantage of this feature, create your user profile as soon as possible. Read the Single-Family News Center article for details.
What's Coming Next?
We have more enhancements planned for later this year including enhanced liabilities feedback and more transparent messages related to debts included in the debt-to-income calculation. Stay tuned for those.
As always, we'll continue to work with you to help you integrate all Loan Prospector enhancements into your current business processes.
For More Information
- Register for the "What's New with Loan Prospector – 2014" webinar. (The webinar will be updated to reflect these changes after June 22, 2014.)
- Visit the Learning Center.
- Ask your Freddie Mac representative for a demonstration of Loan Quality AdvisorSM.