Protecting Fair Lending
February 13, 2023
A core part of the legal team’s job at Freddie Mac is to help ensure we meet fair lending standards, which helps make sure qualified borrowers have equitable and nondiscriminatory access to credit and housing. There are many facets of this work, including working diligently to improve fairness in the credit assessment of borrowers and to root out bias in appraisal reports.
Last year, for example, Legal worked with business segments to improve appraisal bias detection capabilities in our underwriting system and make other important revisions. With better data, more sophisticated modeling, and a culture of challenging our own assumptions, we’ve built better models that have more predictive power and a more nuanced assessment of credit risk. Indeed, Freddie Mac leverages some of its most cutting-edge machine learning to achieve stronger models that are more fair.
Additionally, we’ve updated the Single-Family Seller/Servicer Guide to clarify sellers’ responsibilities for appraisals and establish new requirements for servicers to maintain certain fair lending data elements. These meaningful changes help identify qualified borrowers who might have been overlooked and to protect fairness in credit decisions
