First FHA Loan Passes through Pilot Program
A borrower in Des Moines is on her way to becoming a homeowner for the first time through Freddie Mac's and the Federal Housing Administration's pilot program to automate the underwriting of FHA loans.
This first-time home buyer is also the first mortgage applicant to pass through an FHA-specific version of Freddie Mac's Loan Prospector automated underwriting service. AmerUs Mortgage in Des Moines began sending loans through the system last week.
The goal of the pilot between Freddie Mac, the FHA and 10 lenders is to determine how this technology can be used to expand homeownership opportunities and enhance the speed, efficiency and affordability of FHA loan originations. Approximately 4,000 to 6,000 loans are expected to be made during the six-month pilot.
"We are on the fast track with our Loan Prospector/FHA pilot," said Peter Maselli, Freddie Mac vice president of automated underwriting. "Lenders have shown a high level of interest in the pilot, which tells me they want a full-service automated underwriting system. That's been our vision all along, to give lenders the flexibility to underwrite all their business with Loan Prospector."
The Des Moines borrower applied for an adjustable-rate loan with AmerUs and received a favorable risk evaluation from Freddie Mac in less than two minutes. Because of the risk evaluation, FHA agreed to credit policy waivers and reduced documentation to allow the credit aspect of the loan to be completed in as few as 10 days, a substantial reduction in the time it takes to process a typical FHA mortgage loan. The borrower qualified for maximum financing using gift money and her own funds to cover the down payment and closing costs.
"We are so excited about the possibilities of reducing time and costs on FHA loans," said Donna Ridlen, vice president-underwriting, AmerUs Mortgage, Des Moines. "We think we can achieve the same success with FHA loans that we've had with Loan Prospector on the conventional side of our business." AmerUs currently offers Loan Prospector for FHA loans to its borrowers in Des Moines and expects to offer the service in its other loan origination offices in Iowa; Western Illinois; Springfield, Mo. …