Magazine article American Banker

Freddie Mac to Offer Automated Underwriting

Magazine article American Banker

Freddie Mac to Offer Automated Underwriting

Article excerpt

Leland Brendsel, chairman of the Federal Home Loan Mortgage Corp., raised the stakes in the industrywide technology race last week when he announced that his agency would release its own automated underwriting system later this year.

The system will likely tell lenders early in the loan-making process whether Freddie Mac would buy their loans.

The Federal National Mortgage Association, known as Fannie Mae, is also developing such a system. However, Fannie's chairman, James Johnson, said only that his company would have "broad developments this year."

He declined to specify when the company would make its system available.

The chairmen of the two companies spoke last week at a conference of top industry executives in New York sponsored by the Mortgage Bankers Association. Mr. Brendsel disclosed that Freddie Mac was already testing the system in a pilot program, but gave no further details.

Both companies, which buy home loans from mortgage bankers and other lenders, are engaged in ambitious efforts to develop technology that would simplify the way such loans are made.

Automated underwriting systems are a key part of such initiatives, and would likely be powerful marketing tools for the secondary-market agencies themselves.

In response to a reporter's question after the meeting, Mr. Brendsel said he was surprised that Fannie Mae did not have a more defined schedule for rolling out its own automated underwriting system. …

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