A new automated tool from the Federal Home Loan Mortgage Corp. will enable some home buyers to avoid the time and expense of a full appraisal report.
The tool, announced Friday by the McLean, Virginia-based
secondary mortgage lender, has been dubbed automated collateral evaluation, or ACE.
According to Freddie Mac, using proprietary models and data from multiple listing services, the automated appraisal alternative
assesses the need for a traditional report.
In addition, over four decades of historical home values are analyzed
to determine collateral risks.
By avoiding full appraisal reports, some borrowers
will see closing times fall by seven to 10 days and save as much as $500.
Meanwhile, lender-clients of Freddie will receive
immediate collateral representation-and-warranty relief related to the value, condition and marketability of the property upon loan delivery.
Lenders can determine if a property is eligible for ACE by submitting loan data through Loan Product Advisor, which is part of Freddie’s end-to-end technology solution, Loan Advisor Suite.
ACE, which has been available for refinances since June 19, will be available for qualified home purchases beginning on Sept. 1.