Don’t Miss a Homeownership Opportunity
Top ways to clear Cautions in Loan Product Advisor® (LPASM).
Getting a Caution risk class in Loan Product Advisor is not rejection. It’s a redirection to uncover missed opportunities that are more tailored for your borrower. Check back each month for updated tips and resources.
Expand Credit Opportunities with ECO® Data and Insights
Uncover more opportunities for an Accept and expand credit for your borrower. Use the new Expanding Credit Opportunities dashboard in ECO to help identify your LPA submissions that could benefit from the borrower’s positive cash flow or rent payment history.
All Eyes On AMI
Don’t let the numbers hold you up. The feedback certificate automatically shows you the area median income (AMI) and the borrower’s total qualifying income as a percentage of AMI to help identify more affordable loan opportunities.
Locate the Message Code
Use the feedback certificate’s Affordable Product Information section or identify message FAL0011 to get the AMI and the borrower’s total qualifying income as a percentage of AMI (AMI%).
Guidance for Next Steps
Use the AMI% to see if the loan is eligible for an affordable program and resubmit.
How This Helps Get to Accept
Qualifying for an affordable program provides more affordable opportunities for the loan, increasing the likelihood of acceptance.
Factor in Caution Details
Got a Caution? Not a problem. LPA’s Caution messages provide opportunity. Address these messages first and use the messages’ primary factor flagging, now with additional details and supplementary loan data to quickly identify reasons for the Caution risk class.
Locate the Message Code
Look in the Credit and Liabilities Messages section of the feedback certificate. Caution message codes begin with “FCL” and the text begins with “Caution Factor” to indicate the Caution reason.
Guidance for Next Steps
Use the information in primary factor (reason) flagging, additional details and any supplementary loan data in the messages to edit the loan submission.
How This Helps Get to Accept
By understanding the reasons for the Caution, you may not need to abandon the loan or restructure it. This information can help you quickly work to remediate potential blockers for an Accept.
Tip the Scales to Lower DTI
You get a feedback message (PUR0020) associated with a Caution that indicates the debt-to-income (DTI) ratio is too high. Check if reserves could help lead the way home.
Locate the Message Code
Look for message FAR0083 on additional reserves.
Guidance for Next Steps
Enter all asset accounts for the borrower. Include retirement accounts (IRA, 401k).
How This Helps Get to Accept
Reserves may not be required on every loan, but they could help strengthen loan quality.
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Match Your Clients to an Affordable 3% Down Payment Solution
In today’s market, homebuyers are shopping for a lender that can provide them with low down payment offerings. The Freddie Mac Home Possible® mortgage offers unique flexibility and a low, 3% down payment option.
Locate the Message Code - Identify message FAL0037 which indicates the loan meets Home Possible income limits.
Guidance for Next Steps - Resubmit the loan with the Home Possible loan program identifier in LPA or your loan origination system.
How this Helps Get to Accept - Utilizing Home Possible’s credit fee cap and MI coverage levels can lower your client’s DTI, increasing the likelihood of acceptance.
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Go with the Borrower Cash Flow
You get a feedback message associated with a Caution based on LPA’s credit risk assessment using traditional credit reporting. Check if the borrower’s cash flow qualifies to be used in the risk assessment.
Locate the Message Code - Look in the credit section for message FCL0421, which indicates if the loan may benefit from a positive cash flow.
Guidance for Next Steps - Order an asset verification report and submit the loan to LPA – be sure to include the reference number with your submission.
How this Helps Get to Accept - Leveraging the cash flow assessment can only positively impact the risk assessment.