Freddie Mac's impact on consumers
Because of Freddie Mac, consumers benefit
from lower mortgage interest rates, readily available home mortgage credit, a wider selection of mortgage products and reduced origination
costs.
Freddie Mac does not lend money directly
to consumers - that is the lender's job. Freddie Mac's job is to buy
mortgages from lenders across the country that meet the underwriting
and specific program standards that produce investment-quality mortgages;
this process contributes to lowering interest rates. Freddie Mac is
not responsible for the decisions made by its lenders; however, these
guidelines help lenders decide whether a borrower is willing and able
to repay the mortgage on time and whether the property is valuable
enough to help pay off the mortgage if the borrower defaults on the
mortgage payments.
Loan Prospector®, Freddie Mac's
automated underwriting service, has helped establish a new standard
for delivering low-cost financing to home buyers of all types. Freddie
Mac designed Loan Prospector with input from lenders, mortgage insurers,
software vendors and other key industry players. They went far beyond
simply automating traditional underwriting requirements and reengineered
the loan origination process. Through streamlined processes and reduced
documentation, Loan Prospector helps give lenders the information
they need to make a consistent, fair and reliable lending decision
with greater ease than ever before. Loan Prospector helps expand the
universe of potential borrowers by factoring in mortgage eligibility
alternatives to traditional Freddie Mac underwriting guidelines. And,
Loan Prospector has the potential to make home ownership more affordable
by helping to lower lenders' loan origination costs. As a result,
borrowers can be approved for loans with less hassle, less paperwork
and in less time.
