Enhancement automates income assessment by using borrowers' paystub data
Freddie Mac has made enhancements to its automated income assessment tool that enables lenders to include a homebuyer’s paystub data and direct deposit data in the income assessment.
Lenders using Freddie Mac’s Loan Product Advisor (LPASM) asset and income modeler (AIM) can now assess a borrower’s income paid through direct deposit to also include their digital paystub data.
Freddie Mac said the detailed information is meant to “help lenders calculate income faster and more precisely to improve loan quality, simplify the mortgage process and, most importantly, expand access to credit.”
“Over the last year, we’ve consistently rolled out innovations to ensure our digital tools are improving speed and efficiency, reducing risk and, ultimately, helping us serve our mission by reaching more qualified borrowers,” said Kevin Kauffman, single-family vice president of seller engagement at Freddie Mac, in the company’s official announcement. “Today’s innovation further automates income assessment by using historical direct deposit pay patterns and current gross income from recent paystubs, which can help more families achieve homeownership.”
In addition to direct deposit data, AIM can also determine income from tax return data for self-employed borrowers as well as bank account data (checking, savings, and investment accounts, including data used for direct deposit of income and monthly bill payments, such as rent, utilities, and auto loans) to identify a history of positive monthly cash flow activity. These data enhancements expand the credit access of first-time homebuyers in underserved communities who may not qualify with traditional underwriting methods.
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