Freddie Mac's Impact

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.

 

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