Leveraging Property Intelligence for Home Equity Lending
As credit unions continue to operate in an environment of uncertainty regarding ongoing regulatory change, rising interest rates and a sluggish economic recovery, it may seem difficult to generate the momentum credit unions want to achieve. Whether it’s growth in members, expanded product offerings or the accomplishment of other objectives, credit unions must deal with many uncontrollable factors like the regulatory and economic constraints that exist in the financial services sector.
However, there are many things credit unions can control to help position them to achieve their goals, especially by increasing decisioning efficiency within their mortgage lending operations. For example, with the level of technology and data now available to credit unions, outdated processes can largely be eliminated, while new capabilities are added to improve performance.
One such opportunity exists through the use of property intelligence reports based on public data that can be leveraged at the beginning of conversations with members about home equity loans. By taking advantage of this comprehensive information, loan officers will find that property intelligence reports can help them prequalify applicants much earlier in the process – and without the extra cost and steps associated with running a credit report.
By running a property intelligence report, credit union loan professionals can immediately access information such as the status of the first mortgage; who the owner is and whether there is more than one person on the title; the property location; whether or not the property is owner occupied; whether or not there is any default/foreclosure activity associated with the property; whether or not there are any liens on the property − and if so, who placed the liens − as well as the date, rate and term details for the liens.
Armed with this type of intelligence, credit unions can determine much sooner whether or not it makes sense for a homeowner to proceed with a home equity lending application. They can also determine whether or not an opportunity exists for a consolidation loan, especially for those members who have had a first mortgage for a while.
Leveraging property intelligence reports at the beginning of the origination process makes sense for most credit unions, but it is especially helpful for those that are resource-challenged when it comes to underwriting. For these institutions, the ability to reduce the number of loan applications that are processed but are unlikely to be approved − such as those with a delinquent tax lien on the property, an LTV that is too high, or a property that is not owner-occupied when this is a requirement − can add much-needed bandwidth to the lending operation. Mortgage loan officers who have access to property intelligence reports up-front are able to keep these dead-end loan applications out of the pipeline and focus on efficiently processing loan applications that are more likely to qualify.
Despite the uncertainties in the financial services industry, many credit unions are taking advantage of the property intelligence that is available to them and using that information to streamline their lending operations. To the extent that they can leverage this valuable information earlier in the lending decision process, credit unions will be better positioned to increase their efficiency, respond to member applicants more rapidly, and make decisions that can help them achieve their business objectives.
