Freddie Mac announced that the company will launch a new automated capability that will allow mortgage lenders to assess a potential homebuyer’s income paid by direct deposit to reduce the paper documentation burden for borrowers so they can close deals. loans faster and simplify the loan process.
This income assessment solution is available to mortgage lenders nationwide through Freddie Mac’s Lending Product Advisor.® (LPA) Asset and Income Modeler (AIM). AIM for Income using Direct Deposits delivers these cost savings, while still meeting Freddie Mac’s stringent credit underwriting standards.
“Our direct deposit solution is an innovative, data-driven approach that takes minutes, not days, to assess earnings so our customers can serve more borrowers more efficiently,” said Matt Vincent, vice president. -President of Credit and Capacity of Freddie Mac Single-Family. “Getting data directly from the mortgage applicant’s bank account increases accuracy, eliminates subjectivity, reduces manual underwriting errors, and provides a better experience for borrowers and lenders.”
With over 93% American workers paid by direct deposit, according to the American Payroll Association, AIM is now able to assess more sources of income than ever before. In addition to direct deposit data, with the borrower’s permission, AIM can estimate an applicant’s income from employer data as well as self-employed tax filing data.
“We are thrilled to announce another one-of-a-kind solution to help increase loan origination efficiency,” said Kevin Kauffman, vice president of customer and partner delivery, Freddie Mac Single-Family. “Working alongside our partners, we deliver tremendous value to our lending customers and their borrowers, while leading the industry on its digital journey to modernize the mortgage process.”
A recent Freddie Mac study highlights how lenders, through the adoption of automated Freddie Mac Loan Product Advisor solutions (including AIM), have been able to significantly increase their efficiency and shorten average cycle times by up to 15 days. In addition, these efficiencies have translated into cost reductions, increased customer satisfaction, and improved capacity and conversion rates.
This new AIM capability will be available to Freddie Mac Approved Sellers using Loan Product Advisor. Additional requirements and effective date will be announced in an upcoming March guide bulletin.