Lenders can now save up to $1,500 per mortgage using new automated LPA enhancements
Freddie Mac has announced major enhancements to its Loan Product Advisor® (LPA®), leveraging machine learning to automate underwriting and reduce loan origination costs by as much as $1,500 per mortgage.
The upgrades, effective immediately, are expected to improve operational efficiency for lenders and create a smoother process for borrowers.
“It’s the year 2025, and the time to streamline the homebuying experience is now,” said Sonu Mittal, executive vice president and head of Single-Family Acquisitions at Freddie Mac. “We expedited this version of LPA to increase efficiency and further lower costs.”
According to Freddie Mac, lenders who fully utilize automation through LPA can save up to 40% in loan processing costs. The company’s recent internal analysis found those lenders are cutting costs by $1,500 per loan (about 14%) and shortening loan production cycles by an average of five days.
“After the last four years of astronomical inflation, it is important that we lower costs any way we can, and we encourage lenders to use this technology to pass savings onto customers, effective immediately,” Freddie Mac chairman William Pulte said in a press release.
The government-sponsored enterprise is also launching the Freddie Mac Income Calculator, a free online tool designed to help lenders calculate income for both wage earners and self-employed borrowers. The tool will make it easier to underwrite loans for gig workers and others with complex income streams. Later this year, Freddie Mac will expand the calculator to account for pensions, Social Security, and rental income.
The government-sponsored enterprise is also launching the Freddie Mac Income Calculator, a free online tool designed to help lenders calculate income for both wage earners and self-employed borrowers. The tool will make it easier to underwrite loans for gig workers and others with complex income streams. Later this year, Freddie Mac will expand the calculator to account for pensions, Social Security, and rental income.
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Additional updates include improvements to Freddie Mac’s automated collateral evaluation (ACE), which has already saved borrowers more than $2 billion in appraisal costs since 2017. The new version provides early insight into ACE waiver eligibility, helping lenders reduce costs and time spent on appraisals.
Freddie Mac is also enhancing its LPA Choice feedback messages, giving lenders more actionable insights into loan eligibility and purchase requirements. The updates have already enabled more than 18,000 additional borrowers to qualify for mortgages, according to the company.
All enhancements to LPA are available starting today. Freddie Mac is encouraging lenders to contact their loan origination system (LOS) providers for specific platform release timelines.
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