Quick start: how the use of third-party data positively impacts the mortgage industry


This coin originally appeared in the November 2021 issue of ReportM, available here.

Amidst all of the chaos in the world today, the mortgage industry continues to remain relatively strong. With low interest rates, continued refinancing volumes, demand for mortgages, and the growing number of mortgages coming out of forbearance, mortgage professionals remain busy. While all of this is certainly positive for the industry, it also presents challenges for those responsible for handling high volumes of applications, high customer demands and expectations, ultimately stretching their operational capabilities.

To help alleviate some of these issues, mortgage professionals should focus on streamlining processes through automated technology and data-driven solutions to maintain a more profitable business model and manage changes and shifts. market demands. Part of this includes the ability to effectively leverage third party data that helps provide instant access to borrower information in a secure environment, to help lenders make faster decisions, often on the same day.

This requires information such as pay stubs, investment account lines, bank statements, and other details to be verified. It is much more efficient to confirm the necessary information through third-party business data integrations. Centralizing this information and having it electronically in one place not only reduces the amount of paperwork required, but can also help reduce processing costs. It can drive the automation of workflows, help increase efficiency, and free up internal resources to focus on closing more complex deals, with the potential to generate more revenue for the organization.

Mortgage professionals who efficiently leverage third-party data are able to make lending decisions faster and more securely. Having access to the right third-party data can bring a higher degree of certainty to the process and can help reduce the number of defects over time. Lenders are often required to go beyond the standard credit score to include additional data such as income, assets, and employment information when assessing borrowers’ potential creditworthiness. Evaluating more data in a compressed time frame requires higher levels of automation on the lender’s side.

Fannie Mae announced earlier this year that mortgage agents can use third-party providers to verify the income and employment information provided by the borrower in their application. While this flexibility will help mortgage services better deal with the expected influx of borrower applications as mortgages roll out of forbearance, according to the Fannie Mae service guide, the services will still be responsible for “security, the accuracy and integrity of information obtained from the third party verification provider. “

This guide provides service managers with a way to better understand their portfolios to tackle issues ranging from mitigating the risk of default, defaults and foreclosures, as well as increasing efficiency with NPLs. , all helping to improve overall profitability and predictability over time.

In today’s marketplace, the most successful lenders and service providers are those who are able to best meet consumer expectations for speed and convenience, and do so in a way that creates a pleasant customer experience, without exposing yourself to excessive risk. Integrating third-party data information can be a key step to success.

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