With an anticipated drop in interest rates in the months to come, many homeowners may soon begin tapping the equity that has built up in their homes as a result of today’s historically high property values. It is with that possibility in mind that TransUnion (NYSE: TRU) unveiled TruVision Consumer Property Insights for Portfolio Management to help ensure both lenders and borrowers are protected from the potential risks associated with property value fluctuations.
According to the recent Q3 2023 TransUnion Credit Industry Insights Report, tappable home equity continues to rise, up to $19.7 Trillion in Q2 2023. And while home equity originations continue to lag in this abnormally high interest environment, an anticipated reduction in interest rates may be the motivation for many homeowners to tap into that available equity. As a result, it is imperative for lenders to have a true picture of the property values in their portfolio.
“Both macro and microeconomic conditions and fluctuations can dramatically impact the value of a property, putting both mortgage and home equity borrowers and lenders at risk,” said Satyan Merchant, senior vice president, auto and mortgage business leader at TransUnion. “Having access to current property value insights for portfolio management can help lenders determine the risk of the property values in their portfolio to manage risk exposure.”
TransUnion has long understood the value of these property insights and has previously leveraged them to lenders in the market with Consumer Property Insights for Prescreen. Lenders can now use this same information for portfolio management to help them determine the risk associated with property values in their portfolio to manage their risk exposure.
Portfolio management solutions fueled by property insights can help lenders and servicers address changes in their portfolios to optimize performance and manage risk. Ultimately, this provides a more holistic view to help assess the riskiness of a portfolio from a property perspective.
Consumer Property Insights Property Management provides lenders with an array of new and differentiated insights, such as combined-loan-to-value (CLTV), on each property a consumer owns. As well, it includes characteristics of those properties to help mortgage and home equity lenders gain a deep understanding of the underlying asset securing the mortgage or home equity loan.
The proprietary algorithm links property lien data with the corresponding tradeline, enabling TransUnion to deliver mortgage and home equity lenders more accurate information about the underlying asset by using an actual value for the amount owed on the property instead of an estimated or derived value. This linking enables TransUnion to provide information about all properties (up to 5) owned by a consumer instead of only the property for which the lender might have a Mortgage or Home Equity loan, enabling deeper property value insights in the lender’s portfolio.
TransUnion Consumer Property Insights for Portfolio Management helps customers achieve a better understanding of risk for all properties that consumers in a portfolio have in order to make more proactive and informed portfolio decisions. This helps them to identify early warning signs in property values based on property activity, as well as implement a risk management plan to address significant shifts in market conditions.
Merchant concluded, “This solution significantly increases TransUnion’s value proposition for its already robust portfolio management solutions and will position TransUnion as a market leader insofar as understanding the needs of the mortgage industry.”
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