Freddie Mac’s Mike Hutchins Announces LPA Update; Talks Tech, Repurchases With Fannie Mae’s Priscilla Almodovar

(From left: Mike Hutchins, Priscilla Almodovar and Panel Moderator Laura Escobar; Image by Anneliese Mahoney)

DENVER–Freddie Mac President Mike Hutchins announced Oct. 28 the latest addition to the enterprise’s automated underwriting system (Loan Product Advisor): LPA Choice.

Hutchins made the announcement from the stage at the Mortgage Bankers Association Annual Convention & Expo Oct. 28.

LPA Choice will provide tailored information about purchase requirements and actionable feedback on loans related to characteristics such as debt-to-income ratio and loan-to-value ratio. Hutchins said it will help speed workloads and lower costs, as well as lead to fewer resubmissions to LPA.

“We’re incredibly excited to continue to modify the tool to help you do your job better and lower your costs and hopefully make you more profitable,” Hutchins said.

Looking forward, Fannie Mae’s President and CEO Priscilla Almodovar also emphasized that technology and innovation will be key.

“We’re leveraging data and technology to see consumers differently so that we’re not relying on traditional metrics that our industry has relied on,” Almodovar said.

Almodovar cited progress on factors like considering potential buyers’ history of rental payments, or side hustles, as an effort that’s benefitted many people.

In general, both Almodovar and Hutchins expressed optimism over repurchases–one of last year’s hottest topics.

Speaking after the Federal Housing Finance Agency’s announcement on its authorization of the extension of Freddie Mac’s fee-based performing loan repurchase alternative pilot, Hutchins noted the original pilot has been a “tremendous success.”

“Our repurchase demands are way down as well, and another data point we look at is the appeals that we get, and those are way down as well,” Almodovar said. She also touted validation tools, saying: “If you use one of our tools, we’re seeing your potential defect risk go down 33%. If you use multiple tools, we’re seeing your defect rate go down by 75%.”

And, on one of this year’s hottest topics–affordability–both cited a number of efforts, including each enterprise’s 3% down payment program.

Concerning affordability, Hutchins also provided an update on DPA One, announced at last year’s MBA Annual Convention. It’s designed to match borrowers to available down payment assistance programs. He said that it’s being used in about 38 states, with the plan to have it in all 50 by the end of the year.