Freddie Mac announced that as of June 1st it will now verify borrower employment 10 days ahead of closing automatically. This will make the process more efficient than having to obtain employment verification orally or written. They will verify the borrower’s employment electronically through Freddie Mac’s asset and income modeler. It will gather information from bank accounts for direct deposit or from payroll data provided by a third party. This of course will not be obtained without the borrower’s approval.
Freddie Mac is helping in part of the government’s latest venture in streamlining the closing process. Freddie Mac started to automate the manual process of assessing a borrower’s assets and income back in 2016. Then in 2019, it started to use tax return data to automate the income calculation process.
A great advantage to this is that underwriters are free from doing busy work and can focus on the overall credit picture of the borrower. Automating the underwriting process will help close loans more efficiently. Lenders who are already offering digital were able to close nine to ten days sooner.
