Executive Conversation: Andy Higginbotham on Freddie Mac’s Loan Advisor Suite

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Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Andy Higginbotham, senior vice president of strategic delivery at Freddie Mac, to discuss how the company’s Loan Advisor Suite gives lenders insight into the quality of their closing data.

Q. How does Freddie Mac Loan Advisor Suite help lenders gain more certainty around the quality of their loans?

Andrew HigginbothA. Loan Advisor Suite was designed to give lenders a comprehensive view of Freddie Mac’s requirements and feedback about their loans’ alignment with our requirements. Our goal is to help lenders understand their overall underwriting risk, provide them with greater certainty and reduce their origination costs. The Suite includes Loan Product Advisor, Loan Collateral Advisor, Loan Quality Advisor, Loan Closing Advisor, Loan Coverage Advisor and our Selling System. It also includes a new capability, Business Intelligence. Together, these tools provide insight into quality, risk and alignment with Freddie Mac eligibility, which results in more efficiency.

Q. What kind of reaction have you had from the industry so far?

A. We have received very positive feedback from lenders using Loan Advisor Suite about its ability to give them confidence as they look to sell their loans to Freddie Mac. The Suite gives them access to powerful solutions for every stage of the loan production process, which helps them increase production while reducing risk. They’re also enthusiastic about the simple, user-friendly interface and clear, detailed feedback. With all the change happening in our industry, Loan Advisor Suite is symbolic of what lenders need — innovation.

Q. Freddie Mac will require that lenders use Loan Closing Advisor by Sept. 25, 2017, in order to comply with the UCD, but what benefits do lenders gain by being early adopters?

A. Loan Closing Advisor helps lenders validate their closing data against the Uniform Closing dataset (UCD). It’s our collection solution for the UCD, but it goes further by providing insight on the closing data quality giving lenders a clearer picture of the completeness and accuracy of their data. By having access to this critical information ahead of the closing date, lenders can address any closing data defects before closing. Lenders need to start getting ready now in order to be ready next September. It can take six months or more to build a UCD XML file. Those who start now will have a higher level of comfort with their process earlier, as well as experiencing more efficiency sooner.

Q. Why is Business Intelligence such a critical part of Loan Advisor Suite?

A. It’s about adding speed and increasing a lender’s ability to deliver loans of impeccable data quality. Our Business Intelligence capability enables lenders to identify loan origination issues at a glance by using visual reporting. Its built-in heat maps help identify the primary areas of concern. We built it so the data can be updated in near real-time at multiple points throughout the loan process. This gives lenders the ability to track problems in real time and perform source cause analysis as loans are being processed during the day, enabling them to pinpoint gaps and adjust their processes.

We’re also developing a mobile Business Intelligence iPad app that will let lenders annotate reports and then email them directly to staff. We’re in the prototype phase now and will be piloting it next year.

Q. What are some of the future capabilities you will be adding to the Suite?

A. We’re focused on using big data and advanced analytics to create powerful new Loan Advisor Suite capabilities that will take costs out of the loan origination process, and ultimately, provide certainty through representations and warranty relief. As an example, in early 2017 we will broadly offer collateral representation and warranty relief. In addition, over the course of the next year, we’ll be introducing a no-cost automated appraisal alternative, automated borrower income verification, automated borrower asset verification, and automated assessment of borrowers without credit scores.

We have more than 40 years of historical data that is the foundation of Loan Advisor Suite. By pairing big data with advanced analytics that allow us to automate processes, we’re creating efficiencies and reducing costs for lenders and borrowers. And since every Loan Advisor Suite tool and capability is free, we aren’t adding to a lender’s cost through usage fees.

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