In today’s real estate market, lenders need to make sure they stay competitive. One way to do this is to offer a digital lending process that appeals to borrowers of all generations, regardless of their credit score and finances. HousingWire recently sat down with Joel Rickman, Senior Vice President of Audit Services at Equifax, to address the growing need of lenders to provide affordable financial services.
HousingWire: What trends do you see in borrowers today and how has it evolved in recent years?
JoÃ«l Rickman: One of the biggest and most transformative trends in credit is the call to modernize and digitize the mortgage lending process. Discussions about a digital mortgage have been going on for years, but now more than ever. In a world accustomed to fast-paced interactions and transactions, borrowers expect a similar lending experience. Today’s borrowers demand faster decisions, greater transparency in credit decisions, and the ability to prove trustworthy, even when their traditional credit history may indicate otherwise. These are many layers that lenders have to assume. The good news is that the technology and data necessary to meet growing borrower expectations and stay on par with industry trends are already available.
HW: How can lenders work with the current demographics of borrowers with low or no credit scores?
JR: As an industry, we are already on the right track for better and broader financial inclusion, serving a diverse mix of borrowers in a way that helps meet their unique circumstances. Lenders realize the value of seeing people for more than their credit score. Seeing borrowers for who they are – unique and credible in their own way – requires a broad field of vision. Lenders outside of the mortgage have been using alternative data for thin file clients for years. We believe that a similar approach to mortgage lending has the potential to help millions of quality borrowers gain approval for their home purchases. Leveraging multiple datasets, such as credit data overlaid with income and employment data, is good for borrowers and good for a lender’s business. This approach gives lenders a cohesive and more complete view of risk, helps them make more informed decisions and potentially approve more loans.
HW: What tools can lenders leverage to serve both the digital and traditional consumer?
JR: Whether a consumer is making a transaction in person, over the phone, or online, they all have something in common. They prefer a hassle-free shopping experience. Lenders should invest in solutions that help improve the borrowing experience for all customers. Partnering with third-party innovators like Equifax’s The Work Number can offer automated data to help speed up the application process. During the mortgage approval and underwriting journey, an income and employment verification is usually required. The job number serves both the digital and traditional borrower by reducing the need for lengthy paper processes or sensitive bank credential requests. We are the largest commercial source of consolidated employment information. Our data is pulled directly from the borrower’s employer or payroll service provider. Not all borrowers will have a complete portfolio of digital data. Nonetheless, by simplifying as many steps for as many borrowers as possible, we help improve the efficiency of borrowers and lenders.
HW: What is the job number?
JR: With over 25 years of experience and commitment in the mortgage industry, the Work Number database is the largest commercial repository of consolidated income and employment data. We invest hundreds of millions of dollars each year in The Work Number to expand the database and provide better access to credit. Our cloud-native solutions provide a simplified and enhanced borrower experience, while meeting the requirements of government-sponsored enterprises (GSEs). Automated access to nearly 115 million active payroll records from over one million employers can help mortgage lenders gain valuable borrower information in real time. Adding this target to loan issuance can help increase lending opportunities and strengthen fiscal stance. Most of all, it helps more people get into homes faster.
HW: How does The Work Number help mortgage lenders bridge the generational gap?
JR: It’s a competitive market. Lenders must remain relevant to all generations of borrowers. While most demand a quick and easy digital loan process – online – many still prefer a high-intensity personal contact process. In today’s market, the top performing lenders balance human touch with technology and meet borrowers’ expectations for speed and convenience, while delivering a positive customer experience. It requires the right technological solutions with a variety of delivery options. The job number can help balance the varying demands of each generation in the most efficient way possible.
Automated job number checks present mortgage lenders with a broader perspective of creditworthiness in a secure and transparent manner. Its adaptive nature serves even the most digital generations without affecting the offline customer experience.
The Working Number, from Equifax, can help lenders increase their financial inclusion and potentially their income.