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TH E M R EP O RT | 61 SECONDARY MARKET THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Bringing Self-Employed Underwriting Into the Digital Era Freddie Mac is working to meet the needs of self-employed borrowers while maintaining underwriting standards. F reddie Mac announced that its asset and income modeler (AIM) is now available for self-employed borrowers through Loan Prod- uct Advisor, the company's automated underwriting system (AUS). This is the industry's only AUS-integrated self-em- ployed income assessment solution. With proprietary technology provided by Loan- Beam, AIM for self-employed simplifies underwriting of this borrower segment by automating the lenders' income calculation process and speeding up the mortgage ap- plication process while maintaining strong credit underwriting standards. "There are millions of self-employed workers in the United States and that number is only expected to grow," said Andy Higginbotham, SVP and COO, Single-Family, Freddie Mac. "Loan Product Advisor's AIM for self-employed borrow- ers provides our lenders with a new way to expand their business efficiently. It gives them a competitive edge to help grow their business in a tightening purchase market and gives them confidence they are deliver- ing loans that align with Freddie Mac's pur- chase eligibility requirements as captured in Loan Product Advisor." The U.S. Bureau of Labor Statistics reported that self-employment makes up more than 10 percent of total employment in the United States. This demographic continues to be an important source of jobs for some 15 million people and is expected to grow at the same rate, or faster, than the overall workforce. According to Urban Wire research, in 2007, 80 percent of both salaried and self- employed homebuyers obtained a mortgage loan. As of 2016, 74 percent of salaried homebuyers used a mortgage compared to just 67 percent of self-employed buyers. That's a 13 percentage point drop for self- employed compared to a 6 percentage point drop for salaried buyers. "Together with Freddie Mac, AIM for self-employed borrowers helps us deliver cutting-edge technology to provide the very best customer experience," said Kirk Donaldson, LoanBeam's CEO. "Automating income calculation is a game changer for lenders and their processing staff." "At Freddie Mac, we're continuously in- novating to better meet our lenders' needs to cut costs, drive efficiency, and deliver a better borrower experience," Higginbotham added. "AIM for self-employed borrowers is a win for the industry, and we're excited to make it broadly available." Consumers on the Fence on Housing Fannie Mae explores the factors impacting the consumer sentiment among homebuyers and sellers. T he net share of consum- ers who think that now is the right time to buy a home declined 7 percent- age points in February compared to the same time last year, ac- cording to Fannie Mae's Home Purchase Sentiment Index (HPSI). The report indicated that home seller sentiment had also declined compared to last year, with the number of consumers saying that now was a good time to sell a home dropping 6 percentage points compared to last year, and 5 percentage points to 30 percent compared to January 2018. On a month-over-month basis, Fannie Mae noted that the HPSI remained virtually unchanged, decreasing by 0.4 points to 84.3. The largest change among the HPSI components, the report noted, was a 9 percentage points drop in the net share of con- sumers who reported a substan- tially higher household income compared to the same period last year. However, this drop was offset by an 8 percentage points jump in job confidence. "The HPSI held steady in February, as consumers' continu- ing optimism about economic conditions seems to be balanced with softening attitudes to- ward the housing market," said Doug Duncan, SVP and Chief Economist at Fannie Mae. Duncan noted that home price growth expectations had trended significantly downward with the net share of consumers expect- ing home prices to rise, falling 19 percentage points "from its survey high established at the start of 2018." "Job confidence reached a new survey high, but consumers were less optimistic about home buy- ing and selling conditions than they were a year ago," Duncan said. "While declining home price expectations may point to improving affordability, the share of consumers who think it's a bad time to buy has grown over the last year, and high home prices remain the most frequently cited concern. It is plausible that consumers believe that price gains could decelerate further, making it worthwhile to wait rather than act now." The report indicated that the net share of consumers who said that mortgage rates would go down over the next 12 months also rose slightly, increasing 1 percentage point to -52 percent. This component is up 5 percent- age points from the same period last year, the report said.