Automated Collateral Evaluation Now Available for Purchase Transactions
August 18, 2017
On September 1, 2017, our automated collateral evaluation (ACE), an innovative automated alternative to traditional appraisals, was expanded to include purchase transactions for certain Loan Product Advisor® mortgages. ACE uses big data and advanced analytics to create a faster, less costly origination process. This is a meaningful step forward for our industry that will help save you and your borrowers time and money.
Here’s How it Works:
- Submit your loan to Loan Product Advisor.
- Provide an estimate of value or sales price for the property.
- Data is reviewed by ACE.
- You’re notified of ACE eligibility in the Loan Product Advisor Feedback Certificate.
- Deliver your loan through the Freddie Mac Selling System®.
Submitting to Loan Product Advisor
Keep in mind, to maximize your ability to take advantage of ACE, you should provide an estimated value (in the estimated value of property field) or purchase price (in the purchase price field), not an appraised value when you submit your loan to Loan Product Advisor. These fields should not be confused with the appraised value of property field, which should only be used when an appraisal has been obtained. Once an appraisal is obtained, the loan is no longer eligible for ACE.
What’s New on September 1
Guide Bulletin 2017-13 has the full details, but there are two specific updates to highlight:
- Purchases now eligible – purchase transactions are now eligible for ACE. Purchase transactions submitted to Loan Product Advisor after September 1, even if they were previously submitted, will be assessed for ACE eligibility.
- $1M value limit – both no cash-out refinances and purchases will be subject to this value limit. However, ACE eligible refinances that were submitted to Loan Product Advisor prior to September 1, will not lose the eligibility due to the limit if they’re resubmitted after that date.
Now You Have Two Paths to Immediate Certainty
Immediate certainty means reduced repurchase risk through collateral representation and warranty relief. ACE makes it easier to achieve immediate certainty.
Path 1: ACE
When the loan is eligible for ACE, you receive collateral rep and warranty relief when you deliver the loan through the Selling System.
Path 2: Traditional Appraisal Needed
If the loan is not eligible for ACE, just order an appraisal and submit it to the Uniform Collateral Data Portal® (UCDP®). The loan is automatically assessed by Loan Collateral Advisor® and if it’s eligible for collateral rep and warranty relief, you’re notified in the UCDP. You’ll then receive final confirmation of rep and warranty relief when you deliver the loan through the Selling System.
You can also track all your rep and warranty relief in Loan Coverage Advisor®.
Two different paths, providing the same peace of mind – immediate certainty and greater confidence.