Jennifer Henry: The Role Third-Party Data Plays for Mortgage Originators and Servicers

Jennifer Henry is Vice President of Strategy and Marketing with Equifax Mortgage & Housing Services. She is responsible for pricing, product management, product marketing, campaign management and mergers and acquisitions. Henry brings more than 20 years of experience to her position at Equifax, including operations, technology, marketing, sales, product management, mortgage loan quality and loan origination services. Prior to her position at Equifax, she held leadership roles with First American Mortgage Solutions and Fannie Mae.

As the nation eases out of the pandemic, the state of the residential mortgage industry remains strong. While the industry has seen some expected reduction in refinance volumes, continuing low interest rates, high demand for first mortgages, and a number of mortgages easing out of forbearance are positive signs for the industry’s long-term outlook. This volume, however, can present a challenge for mortgage professionals, both on the origination and servicing sides of the industry who are tasked with processing the influx of applications and requests that is stretching their existing operational capabilities.

While originators are faced with challenges related to meeting borrower expectations, processing loans quickly and verifying consumer information, servicers also face operational challenges, such as identifying potential risk within their portfolio; retaining assets; and efficiently executing policies in accordance with regulatory and compliance requirements and guidelines.

The result?  Meaningful digital transformation of the mortgage origination and servicing processes has taken on a new level of urgency.

Lenders and servicers alike must focus on streamlining processes through automated technology and data-enabled solutions to sustain a more profitable business model and manage the shifts and demands of the marketplace.

With the recent Servicing Guide Announcement by Fannie Mae that mortgage servicers can use third-party vendors to verify the income and assets provided by the borrower in the mortgage assistance application, it is evident that the Government-Sponsored Enterprises (GSEs) are encouraging steps to digitize the process as well. While servicers will be responsible for the “security, accuracy, and integrity of the information obtained from the third-party verification vendor,” as the new Servicing Guide states, this flexibility will help mortgage servicers better process the expected influx of borrower requests as many mortgages begin to come out of forbearance. By leveraging the same third-party data which has become the “gold standard” in the mortgage origination process, servicers can  now also benefit from the added confidence in the quality, accuracy and efficiency of these digital solutions.

As we look to the future, having access to the right data can bring a higher degree of certainty to the process and can help yield fewer defaults over time. Servicers can gain better insight into their portfolios to help mitigate delinquency risk, defaults and foreclosures, and increase efficiencies with non-performing loans — all helping to improve overall profitability and predictability over time.

Servicers and lenders that effectively leverage third-party data are positioned to more quickly and securely make decisions in a compliant manner. This requires information such as credit scores, employment and income details, tax forms and other consumer information to be verified through third-party integrations. Having all of this information centralized and available electronically in one location significantly reduces the amount of paper documentation required. This, in turn, drives workflow automation, increases efficiency and helps reduce the need for unnecessary manual reviews for both lenders and services, ultimately enabling internal resources to focus more attention on revenue-generating activities.  

This insight also helps borrowers by identifying opportunities such as determining which consumers could benefit most from refinancing; helping individuals avoid potential default; or helping originators determine the best loan product for the borrower’s financial wellness.

The industry will continue to evolve in the post-pandemic economy. The most successful originators and servicers are those that can best meet customer expectations of speed and convenience and deliver on that in a way that ensures they are not putting themselves at undue risk and integrating the insights of third-party data is a key step toward success.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)