Freddie Mac Automates Verification Functions for Underwriting Process


Freddie Mac has unveiled new automated underwriting capabilities that allow lenders to verify assets, income and employment using borrower-approved bank account data. This functionality will be available to mortgage lenders nationwide through the Asset and Income Modeler (AIM) in Freddie Mac Loan Product Advisor (LPASM), the company’s automated underwriting system.

“This industry-first innovation supports our mission of making sustainable homeownership more affordable and accessible,” states Andy Higginbotham, Freddie Mac’s single-family COO. “Our AIM suite of services will be instrumental in bringing greater accuracy and efficiency to the underwriting process, which will be critical as the mortgage landscape continues to shift toward greater purchase market activity.”

AIM’s newest enhancement, the automation of 10-day pre-closing verification (PCV) of employment, will be available June 1, 2022. The capability provides the borrower’s current employment status using borrower-approved bank account (direct deposit) or payroll data obtained from designated third-party service providers. This provides lenders a more efficient option than obtaining oral or written verification of employment prior to closing.

“Freddie Mac’s focus on risk management is critical to delivering on our mission in all economic cycles,” says Terri Merlino, Freddie Mac’s single-family chief credit officer. “These enhancements to our underwriting system increase accuracy and reduce fraud by sourcing bank account data. They also reduce manual underwriting errors and delays created by the back-and-forth document paperchase.”

Initial service providers supporting Freddie Mac’s automated 10-day PCV capability include Equifax, Finicity (a Mastercard Company), FormFree, PointServ and Blend.

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