Loan repurchases are an ongoing concern, especially in this market of elevated interest rates. But by flipping the script, this challenge can actually serve as an opportunity to engage with the industry. Leveraging and adopting digital solutions across the ecosystem help mitigate risk and improve loan quality.

Kevin Kauffman, Vice President, Single-Family Seller Engagement, recently sat down with Michael Moeser, Senior Industry Analyst at Arizent, at the 2023 National Mortgage News Digital Mortgage Conference to discuss how technology can help overcome current industry challenges.

“Managing the risk of the industry is a shared responsibility,” Kauffman said. “By identifying technology and different components to improve our business and lenders’ business, we’ve seen a dramatic decrease in loan repurchases.”

And it’s not just cost savings on repurchases that’s impacted from digital tool usage. Recent studies by Freddie Mac that focused on loan quality and the cost to originate showed that organizations that leverage technology tools at a high rate saved around $2,300* per loan origination.

It even starts earlier, with identifying ways for a potential homeowner to arrive at a level of confidence and ability to afford their mortgage — and for Freddie Mac to be comfortable with the loan as a sound risk. “One of the biggest opportunities out there has been around down payment assistance,” or DPA, Kauffman pointed out. Freddie Mac’s new DPA One® is a free, online resource to help housing professionals match DPA programs for borrowers who need financial assistance to purchase a home, tying into our mission to create affordability. “DPA One® is going to put tools in the hands of loan officers and municipalities so they can focus on creating greater opportunities for underserved communities.”

And Freddie Mac innovations like asset and income modeler (AIM), Loan Product Advisor®, and the suite of application programming interface (API) solutions continue to reduce steps, drive efficiencies and ultimately, change behavior across the ecosystem. As Kauffman put it, “We look to be a different GSE and engage with the industry in a way that’s truly unique .”