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Freddie Mac in mid-February rolled out its Loan Prospector automated underwriting system and the first of two optional features that will help cut processing time significantly.
The Loan Prospector program for credit evaluation and mortgage insurance processing reached the market Feb. 14. Demand "has been fantastic," said a spokesman.
In another 40 to 60 days, Loan Prospector lenders will have the option of using the system's alternative to traditional property appraisals.
"Loan Prospector has the potential to the greatest innovation the mortgage industry has seen since the introduction of the mortgage-backed security by Freddie Mac declared James Taylor, executive vice president of Midland Financial Services, a Des Moines, IA-based mortgage bank.
Fannie Mae plans to begin selling its automated underwriting product, Desktop Underwriter, in mid-April, a spokesman said. Loan Prospector pigeonholes loans into three categories. The first, "accepted," is self-explanatory.
If accepted and if the loan-to-value ratio is greater than 80 percent, the application can be sent forward to a mortgage insurer chosen by the lender.
All major private mortgage insurers are represented on the Freddie Mac system.
If an application is not classified as "accepted," Loan Prospector labels it either "refer" or "caution."
An application classified "refer" is sent to the lender's underwriting department....