TransUnion’s new TruVision Consumer Property Insights for Portfolio Management solution protects borrowers and lenders alike by providing a more holistic view of potential risks posed by property value fluctuations. Senior vice president, auto, and mortgage business leader Satyan Merchant said the tool offers such insights as combined loan-to-value on each property a consumer owns, along with individual property characteristics that deliver a more profound understanding of the underlying assets securing a loan.
How TruVision Consumer Property Insights for Portfolio Management works
A unique algorithm links property lien data with the corresponding tradeline. This provides lenders greater accuracy about an underlying asset by using the actual value for the amount owed instead of an estimated or derived total. TransUnion can provide information on up to five properties a consumer owns.
Merchant said TruVision Consumer Property Insights for Portfolio Management has been eight years in the making and grew from a need to provide the information that those holding risk against a portfolio might need. It utilizes data from more than 3,000 local jurisdictions on property taxes, sales and assessments.
Normally, assessments access detailed information on the borrower and the property. That view falls short because it needs to account for the financial state of a borrower’s other properties. That customer may have fully paid off their primary residence, but they owe a bundle on a little pied-a-terre somewhere in the mountains.
“We decided to build this product that links it all together,” Merchant said. “We built a proprietary algorithm that can link a consumer and all of the mortgages on their credit file and home loans and credit file to all of the properties, and with some very high certainty, we’re ensuring we’re looking the right properties to the right consumer.”
Stakeholders can quickly see how many properties a consumer has, what type they are, their total value, and net equity. They can compare information from across the United States.
“That is a view that we don’t believe exists anywhere in the industry,” Merchant said. “So that’s why we went out and built it.”
Is Merchant surprised such a tool hasn’t been developed yet? Some have long identified the need, and some have sought to build it. However, building the proper links while staying compliant is more complicated than it looks.
“We can leverage what we do great, which is consumer identity and pulling together information about a consumer,” Merchant said. “It’s just adding another layer. We want to do the credit side. Let’s just add the property side to that.”
How lenders and borrowers benefit
Merchant said such tools benefit lenders because it allows them to determine how leveraged their portfolio is across all properties. Those insights will help them decide whether to expand their portfolio or hold back due to significant exposure. Such information is especially vital in today’s environment when folks are waiting for rates to fall.
Lenders are preparing to generate growth as those rates fall, and TruVision Consumer Property Insights for Portfolio Management helps them do just that.
“Having this additional insight into the current state of the portfolio will help them with their strategies,” Merchant said. “A lender needs to know these things across their existing portfolio to make strategic decisions moving forward in what we expect will be a growth market in the next couple of years.”
Refinancing opportunities abound as home equity hits $20T
Merchant said that while delinquencies have crept up, they are still relatively low, just above 1%. The story is in the sad state of originations, which in Q1 of 2023 were less than one million. Compare that to Q1 of 2021, when there were four million. In Q3 of 2023, they were only 1.2 million. The moving target is when rate cuts will happen and warm up the market.
What today’s climate does lend itself to is refinancing, Merchant said. Those who did buy homes when rates were higher could seek lower terms as they fall. Others who may have moved up or elsewhere in the country stayed put due to the earlier low rates.
Home equity has surged to an all-time high of $20 trillion. As folks consider leveraging it, Merchant said they can look to TruVision Consumer Property Insights for Portfolio Management to assess their current risk level. Lenders can use it to launch incentive programs, such as encouraging those with a chunk of record-high credit card debt to consolidate at lower rates.
Merchant expects fintechs to be among those who benefit the most from TruVision Consumer Property Insights for Portfolio Management.
“This is an example of us expanding beyond credit and trying to pull valuable and large data sets together and make them available to fintechs, lenders and whoever can use this to serve a consumer,” Merchant concluded.
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