Freddie Mac says the flow of loans through its automated underwriting system has increased briskly and should account for half of its volume next year, up from 20%.

The system, called Loan Prospector, handled 100,000 loans in its first 15 months and another 100,000 in the last seven-and-a-half months. "We're seeing a steady and growing demand for Loan Prospector, which is why we've been able to double the volume in half the time," said Peter Maselli, Freddie's vice president for automated underwriting.

Mr. Maselli also said 350 lenders have adopted the system since its inception, and 25,000 property evaluations have been conducted through the Collateral Express feature.

The Freddie Mac executive said he expects usage of Loan Prospector to accelerate because of its expanded capability. Lenders now can underwrite jumbo and subprime loans, as well as special kinds of credits such as mortgages with 3% down payments. A government-loan module is in pilot testing.

"By giving lenders a single platform for virtually all of their production, we are giving them a more powerful risk assessment tool, which will allow them to price more competitively," Mr. Maselli said.

Freddie Mac, formally the Federal Home Loan Mortgage Corp., has been vying with Fannie Mae, the Federal National Mortgage Association, to attract lenders with automated underwriting systems. The competition heated up recently when both announced enhancements during the annual conference of the Mortgage Bankers Association of America in San Francisco.

At a conference in New York last week for analysts and investors, president David W. Glenn said by providing lenders with easy access to the secondary markets, Freddie Mac expected growth in its mortgage portfolio to grow faster than the residential mortgage market.

He pointed to the enhancements, which he said empower lenders and capitalize on Freddie's advantages.

Both Freddie and Fannie stand to gain volume next year from the increase in their loan limits. Early indications are that the two may announce raising their ceilings by about $10,000, to $217,000, when a home-price index for October becomes available late this month.

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