Freddie Mac and ICE Collaborate to Help Lenders Improve Loan Quality

LAS VEGAS, March 19, 2024 (GLOBE NEWSWIRE) -- Freddie Mac (OTCQB: FMCC) and Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced they’re working together to bring greater loan quality to the mortgage origination process so lenders can effectively serve more borrowers while reducing risk. The collaboration will leverage both companies’ automation technologies and solutions to help lenders quickly and efficiently underwrite mortgage loans starting at the point of sale.

“We’re joining forces with ICE to combine our organizations’ unique strengths to help more lenders deliver higher quality mortgages in this challenging market,” said Kevin Kauffman, Freddie Mac Single-Family Senior Vice President of Seller Engagement. “Our collaboration with ICE builds upon Freddie Mac’s commitment to improve loan quality from origination through delivery so we can help reduce defects, lower costs and bring greater efficiency to the mortgage origination process.”

The announcement was made during the ICE Experience 2024 conference, an annual event that gathers together thousands of leaders in the real estate and housing finance industries to showcase the latest technologies driving the digital mortgage market forward, from ICE as well as other industry participants.

“ICE is on a mission to make the path to homeownership as fast, transparent, accessible, and simple as possible,” said Tim Bowler, President of ICE’s mortgage technology division. “Our innovations are targeting core issues associated with the cost and turn times of mortgage origination. We’re proud to collaborate with Freddie Mac on the critical matter of improving loan quality to streamline the housing finance market and help minimize related repurchases.”

Over the last two years, Freddie Mac has announced automated capabilities that allow lenders to use asset and employment data to verify a borrower's assets, income and employment, as well as consider cash flow and rent payment history in the risk assessment.

Kauffman added, “As more lenders consider adopting digital tools to mitigate risk and drive improvement in overall loan quality and portfolio performance, this effort signifies the next level of industry collaboration.”

Recent analysis shows that loans originated by lenders leveraging certain Freddie Mac automated offerings are up to four times less likely to produce defects than loans without these technology offerings. Process automation is especially beneficial for documenting income, both in the collection and assessment process. That’s vitally important because income verification issues account for nearly one-third of all purchase transaction defects.