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America’s Community Bankers has told Freddie Mac that its partnership with HomeAdvisor Technologies, Inc., a company controlled by Microsoft, to use Freddie’s automated underwriting system for an Internet mortgage loan program, appears to have no benefit for ACB members.

“Our members feel quite strongly that this venture will operate only to further the needs and interests of those large originators among the equity participants, most likely to the detriment of the smaller originators,” ACB Chairman William A. Fitzgerald and ACB President and CEO Diane M. Casey said in a letter to Freddie Mac Chairman and CEO Leland Brendsel.

“The benefits of an exclusive arrangement intended to rely on volume of originations rather than asset quality is something that is to the detriment of our membership,” ACB said. “Why we should support programs with this bias truly eludes our members.” ACB said it arrived at its conclusions after a series of briefings with members and Freddie Mac officials.

ACB also said it will ask the Department of Housing and Urban Development and the Office of Federal Housing Enterprise Oversight to undertake a thorough review of the details and policy implications of the Freddie-HTI arrangement and its effect on Freddie’s ability to meet the purposes for which it was chartered.

A copy of the letter is linked.