Loan Product Advisor® (LPASM) asset and income modeler (AIM) has expanded to pave the way for a smoother closing process and more representation and warranty (R&W) relief. Learn more about this enhancement which allows R&W relief eligibility for the borrower’s current employment and other LPA enhancements related to calculation updates for government loans, CHOICERenovation® and more.

November LPA Release

The November Release Notes include:

  • New capability for LPA AIM to assess the borrower’s current employment and offer R&W relief eligibility using data sourced from payroll or asset reports (including employment-only reports) or digitized paystubs and W-2s. R&W relief eligibility will be provided via feedback messaging. This aligns with a policy update made in Single-Family Seller/Servicer Guide (Guide) Bulletin 2024-13.
  • Updates to the Originating Company field on the feedback certificate so that the originating company name on LPA resubmissions will change if the company’s name changes due to rebranding, acquisition, etc.
  • Calculation updates for U.S. Department of Veterans Affairs (VA) and Federal Housing Administration (FHA) loans, based on your feedback.
  • New program identifiers to streamline the delivery of CHOICERenovation loans across the origination and delivery datasets. We’re also making feedback message updates to align with recent policy changes related to CHOICERenovation announced in Bulletin 2024-13.

For full details, check out the November LPA Release Notes.

Risk Assessment Update

Freddie Mac routinely reviews LPA’s risk assessment to determine if changes are necessary in light of market conditions and performance data. As part of this process, we implemented updates to LPA’s risk assessment on September 8, 2024. These changes are effective for initial submissions to LPA on and after September 8, 2024, addressing:

  • Trended credit data requirement
  • Submissions with the following:
    • Multiple high-risk factors
    • Non-amortizing affordable seconds (no payment required before the due date of the 61st monthly payment under the first lien mortgage)
    • Positive rent payment history and borrower cash flow in asset verification reports

Depending on your portfolio mix, these updates may result in changes to the number of Accept risk classes or Caution risk classes on submissions. Note that positive rent payment history and borrower cash flow in asset verification reports have the potential for greater benefit as a result of these updates. These changes support prudent risk management and sustainable homeownership.

If you have any questions, please contact your Freddie Mac representative or call the Customer Support Contact Center (800-FREDDIE).

Feedback Message Updates Coming Soon

  • Mission indication score – new message to provide a loan-level mission indication score for loans based on income, borrower and property criteria.
  • Guide alignment – revised and retired messaging to align with language in the Single-Family Seller/Servicer Guide.

Tailored Numbers, Real Opportunities: LPA ChoiceSM

LPA Choice is finally here. New and enhanced feedback messages will deliver unprecedented, actionable information so you don’t miss opportunities to turn Cautions to Accepts. For certain loans that receive a Caution risk class, LPA Choice feedback messages offer information about our purchase requirements and actionable feedback that can help you make faster, informed decisions about how to proceed.

If you can provide the information identified in the messages and resubmit to LPA, the loan is more likely to turn into an Accept. Learn more in the October Release Notes or on our Run with Opportunity webpage.