Freddie Mac says it is now offering its automated collateral evaluation (ACE) service to consumers who are buying homes or refinancing existing mortgage loans. The ACE process assesses the need for a traditional appraisal by leveraging proprietary models and using data from MLS and public records, as well as historical home values, to determine collateral risks.
“By leveraging big data and advanced analytics, as well as 40+ years of historical data, we’re cutting costs and speeding up the closing process for borrowers,” says David Lowman, executive vice president of Freddie Mac’s Single-Family Business. “At the same time, we’re providing immediate collateral representation and warranty relief to lenders. This is just one example of how we are reimagining the mortgage process to create a better experience for consumers and lenders.”
Borrowers may be able to realize savings, in some instances, of approximately $500, and closing times may be reduced by as many as seven to 10 days in cases where Freddie Mac’s new capability determines a traditional appraisal isn’t needed.
To find out if a property is eligible for ACE, lenders must submit loan data through Loan Product Advisor, the cornerstone of Loan Advisor Suite. Loan Advisor Suite is Freddie Mac’s smart end-to-end technology solution that assesses credit, capacity and collateral to help lenders validate the quality of the loans they originate. Lenders receive real-time risk assessment feedback and information about the loans.
ACE will be available for qualified home purchases beginning on Sept. 1, 2017; it has been available for qualified refinances since June 19, 2017.
If ACE determines that the estimated value of the home provided by the lender is acceptable, the lender may receive immediate representation and warranty relief related to the value, condition and marketability of the property upon delivery of the loan to Freddie Mac.