Lenders are working hard to adapt to today’s volatile environment, thanks to an ever-changing market and the continuing effects of COVID-19 on businesses and the economy. HousingWire spoke to Paul W. Harris, Head of Mortgage Analytics at First American, about how data and information can both reveal and solve lender’s problems in these uncertain times.
Housing wire: What are the main challenges facing lenders and mortgage professionals today?
Paul Harris: During this period of unprecedented job losses, historically low interest rates, large volumes of refi and purchases and pandemic-related health problems for employees, borrowers and other loan participants , the origination and management processes have changed considerably.
On the origination front, lenders face challenges with quick employment and income verification, limited physical assessments or assessment waivers, and undisclosed debt.
In the service arena, while the number of forborne loans appears to be on the decline, the future is unknown as cases of COVID-19 and associated resource constraints are on the rise in many states.
HW: How is First American responding and helping lenders meet these challenges?
PH: Our goal is to mitigate risk at the time of application. Therefore, we are continually refining our data and analysis so that lenders don’t have to work so hard to get a loan.
First American offers several different solutions that create valuable and reliable scoring models and analysis to resolve issues as they arise. The solutions also address the daily concerns of a credit professional: loan quality, evaluations and customer retention / acquisition.
On the origination front, mortgage professionals can take advantage of our FraudGuard solution or our standalone APIs to facilitate Employment Verification (VOE) and Income Verification (VOI). As lenders begin to use employer contacts outside of underwriting to verify or recheck employment at the end of the loan, reliable job contact information can often make or break a deal.
However, a neutral source to verify that the business is still in business, with employees full-time, part-time or on leave, is often difficult to find and very expensive. FraudGuard automatically offers an additional contact outside the company for third party verification with a high return rate included in the package.
Another unique challenge is appraisal exemptions and limited physical appraisals that we can support with automated appraisal models and our property reports. Our cascading AVM model provides lenders with a high success rate and instant results, which is important in both mortgage and real estate channels.
Lenders can take advantage of several different solutions to verify undisclosed debts. Whether it’s our Undisclosed Debt Monitoring Module, Real Estate Owned Modules, Open Lien Reports, TaxSource, HOA / PACE Lien Data, or Lien & Judgments, Lenders have many resources in FraudGuard, DataTree Online, via the API or in the form of stand-alone reports. .
On the maintenance side, we have the First American Tobearance Indicator available both as a stand-alone product and with the integration of FraudGuard. The indicator helps repairers and contractors meet the current abstention challenges they manage.
HW: A lot of people associate First American with title insurance. How does data and analytics activity fit into the organization?
PH: At First American, we’ve been collecting data for over 100 years and digitizing data for almost 50 years. Data is just as important on the start-up side of the business as it is on the manufacturing side of the title.
Data is truly our DNA, and we have maintained the leading position in the industry with our data assets and robust analytics. Data is the raw material for all of our solutions, whether it’s for the production of titles or to help origination lenders and services in their efforts.
HW: Are these data used beyond mortgage origination?
PH: Yes, First American data supports all aspects of real estate finance – from customer acquisition, processing and underwriting to maintenance, loss mitigation and portfolio monitoring. Our skilled team of data solutions experts are committed to delivering best-in-class data, where customers need it, when they need it.
The collective experience of creating, maintaining and growing the industry’s largest public record database, coupled with our expertise in developing new technologies, delivers results that will set our clients apart from the rest of the world. financial services and put them in front of their customers before the competition. Our data can be consumed or delivered through a variety of different channels and solutions:
- DataTree Online is our self-service destination and provides customers with flexible search and verified search to help them easily find records. We have over 7 billion document images and over 80 reports available on DataTree.
- We also have our digital gateway, which is our API storefront and offers over 50 APIs that can be leveraged in point of sale and loan origination systems.
- Bulk Data Licensing, a third distribution channel, allows our clients to leverage First American real estate data, with ownership and ownership information, in bulk to combine with source and / or service data to to create derived internal solutions or use them for research and analysis.
- And finally, we offer Advanced Data Solutions, which is a professional services team that can create fully customized solutions to meet the unique needs of our clients. Examples of these solutions include portfolio monitoring, position and lien monitoring, and market share reports.
HW: How is First American using its data and technology to prepare for the future and adapt to a rapidly changing environment?
Our combined years of experience and state-of-the-art data acquisition processes allow us to consistently provide unmatched service to our clients, even in the face of the challenges of the massive movement of files from refinancing and the recent major disruption in financials. county services.
We are constantly creating new solutions to meet the evolving business needs of our customers and the market. We constantly engage end users in conversations with our product team to gather their feedback, strengthen relationships, and continue to create a superior user experience at the forefront of our innovation processes.
Looking ahead, we predict that there will be an increase in loss mitigation with these abstentions which may or may not be reversed. Economic uncertainty will continue to push interest rates down, leading to both refinancing and buying volume of loans.
We stand ready to continue to meet these needs head-on to improve efficiency and reduce origination cycle time, as well as provide documentation and master data to repairers and other stakeholders in the real estate finance industry. .