Freddie Mac Begins Using Automated Collateral Evaluation for Purchase Transactions
Articles by: Richey May, Aug 23, 2017
Effective September 1, 2017, Freddie Mac will begin using automated collateral evaluation (ACE) to determine whether an appraisal is required for a purchase transaction. Freddie Mac previously used ACE only for refinances, but this rollout to purchases as well could create benefits for both borrowers and lenders. Borrowers could see less money required to close a loan and closing speeds improved by 7-10 days. As for lenders, with shorter lock dates, the period subject to market movement is also shorter, therefore allowing adjustments to hedging strategies based on the duration/period of exposure. And with less cost to close for the borrower, could that also mean an increase in origination fees? Time will tell.
Read more about Freddie Mac and their use of ACE.