Freddie Mac officials have revealed an initiative designed to help homebuyers realize savings and reduce closing times.
The automated collateral evaluation (ACE) assesses the need for a traditional appraisal by leveraging proprietary models and using data from multiple listing services and public records, as well as a wealth of historical home values to determine collateral risks.
By utilizing ACE, officials said consumers could experience savings of approximately $500 while closing times may be reduced by as many as seven to 10 days in cases where capability determines a traditional appraisal isn’t needed.
“By leveraging big data and advanced analytics, as well as 40-plus years of historical data, we’re cutting costs and speeding up the closing process for borrowers,” David Lowman, executive vice president of Freddie Mac’s Single-Family Business, said. “At the same time, we’re providing immediate collateral representation and warranty relief to lenders. This is just one example of how we are reimagining the mortgage process to create a better experience for consumers and lenders.”
Freddie Mac officials said if ACE determines the estimated value of the home provided by the lender is acceptable, the lender may receive immediate representation and warranty relief related to the value, condition and marketability of the property upon delivery of the loan.