Anticipating and growing personal loans in 2017

Mortgage underwriting is entering a new phase. In a recent conversation with HousingWire’s Allison LaForgia, Michele Bodda, Group President of Experian Housing, Verification Solutions, and Employer Services, discussed how modern credit scores, alternative data and verification tools are changing how lenders evaluate borrowers.  Lenders can now judge modernization by its results, Bodda said. “Now we’re actually letting more modern scores get into underwriting to help price loans and go all the way through to securitization,” she told HousingWire. “We’re letting the scores and the data actually speak for itself instead of just talking about it.”  The Right Data at the Right Time  Modernizing underwriting means providing useful information at the right stage, rather than giving lenders everything at once. “You don’t need everything all at once. You don’t need everything on initial pull,” Bodda said.  Alternative data, such as rental payments and buy now, pay later activity, can help show how consumers manage obligations, especially those with thinner credit files. A thin credit file does not necessarily mean someone has a thin financial life.  “It’s our responsibility as one of the primary data providers to make sure we can make all of that available, so that we’re best representing the consumer,” Bodda said. A fuller view of data may help lenders identify creditworthy applicants who might otherwise be difficult to assess.  Simplifying Verification and Reducing Friction  Bodda also shared how Experian is making credit information more easily accessible and reducing unnecessary costs during the originations process, explaining that new enhancements to Experian’s Power Profile Plus allow lenders to pull credit data at the start of underwriting and request another score later without repurchasing the data.  “You can pull it later and not pay for the credit data again,” Bodda said.   Experian is also investing in income and employment verification, including through a new partnership with Workday. Bodda explained that Experian will continue to focus on process improvement, competition and innovation across the mortgage ecosystem.  A Broader Path to Homeownership  As consumer expectations and underwriting capabilities evolve, borrowers want a process that reflects their financial lives, while lenders seek greater efficiency. Modern scores, relevant data, and streamlined verification can help lenders assess applications with more context—and may help more people pursue homeownership.  “If we as an industry can open this up and bring more people into the process, then we’re going to thrive,” Bodda said in the interview.   Watch the interview and hear all of Michele’s insights, and more here.  

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