Your personal data is pretty much everywhere these days, and although there are strict laws related to how lenders can use that information to generate mortgage offers, there’s a little more flexibility for them to use your publicly available information to target existing loan products toward you. Sandeep Kharidhi, general manager of data and analytics platforms at Deluxe, spoke to Bankrate recently about how his business-to-business (B2B)-focused company is helping lenders streamline their offerings, and what the future of personal data usage might look like in the mortgage industry. The conversation has been edited for length and clarity.
Can you tell me a little bit about your company and the work it does in the mortgage space?
In general at Deluxe we help businesses deepen customer relationships through trusted technology-enabled solutions. At the heart of this is our data solutions. We have a wide range of data assets that our customers leverage including regulated and non-regulated data. Our clients are leveraging these data sets both for new customer acquisition and maintaining and growing existing relationships they have.
What does that mean for consumers?
We’re focused on the B2B aspect. We advise our customers — banks, mortgage companies, loan agencies etc. — to make the needs of the consumer front and center. Understand the loans they’re currently in, what’s happening with their property and tailoring the loan offer appropriately.
It’s a great time for borrowers to look at options, like converting to a 15-year mortgage. It could be a straight rate and term refi. If there’s an existing home equity loan or a subordinate lien, would it still make sense for the consumer to cash out? They could consolidate and cash out and still wind up saving money.
Because of our B2B focus how are we talking about this to the consumer? These are the types of things we help lenders look at, but the consumers should also look at their options. Because they’re in a 30-year mortgage, don’t just look at other 30-years. The other piece is a lot of our clients are focused on rate and term refinances, understandably, because it’s so easy. We’re starting to see more interest in cash-out refinances as well as purchase mortgages.
Is data used to generate specific offers or just to target existing offers to specific borrowers?
First and foremost, the way we advise our customers, the lenders who leverage data, is by telling them to gain a better understanding of the consumers. The last thing you want to do is send somebody an offer that doesn’t qualify, because then you’ve created a subpar customer experience.
Once you identify the audience, you can leverage additional data to contextualize the offer. If the borrower is already in a 15-year mortgage, you don’t need to spend time educating the borrower on the benefits of the 15-year. On the other hand, if the borrower is in a 30-year mortgage, and you see they’re affluent and don’t have other debts, you can surmise they can afford the 15-year and you can educate them.
Data helps you understand the eligibility and the audience, and then it helps you tailor the offer.
What’s the future of data in the mortgage industry? What will it take before more data is used to refine loan offers?
Consumers would benefit from knowing a prospective lender is looking at their creditworthiness, information about their property, their payment history, which lender they’re with today. What is the value of their home? What’s the price trend and the property tax trend? Is there an HOA? If it’s an existing customer, identify what may help with retention. If the home has appreciated a bit in value and the consumer has no non-mortgage debt, that would be a great time for the lender to make an offer.
As consumers, our expectations area ever-increasing. We’re getting more and more impatient. We want everything now without much effort. In that aspect I believe data and digital capabilities will continue to evolve. Data is going to be a centerpiece. Rather than the lender asking the borrower to prove that the home they’re in is their primary residence, rather than putting the burden on the consumer, could the lender leverage other data?
Is the home vacant or occupied? Rather than putting the burden on the consumer to prove that, could they leverage streaming data? If there’s television streaming happening six to eight hours a day, someone lives there. It’s not happening today mainstream, but that’s where I see it going.
Given the lending space and this being a financial product I always expect there to be some regulatory pressures and privacy concerns that lenders shy away. But steps are being taken, there are some products for pay verification, for example, where you don’t need to upload your documents. Those types of things are increasing, but even if we get to a point where it says, “Dear Sandeep your offer is going to be…” there’s going to need to be adequate disclosures. Even if the financial calculations are all right, the consumer will need to understand what it contains. You have to make sure the consumer is aware of those additional terms.
What else should people know?
Even though I’m a data-oriented marketer, I’m a consumer first. As a consumer, we should know what data exists on us. That might be as basic as checking your credit report from the credit reporting agencies on an ongoing basis and understanding what data the lenders use. Being aware goes a long way and if there’s any inaccuracies, pointing that out to the companies that have that data or the lenders using the data. There are a number of protections consumers have these days where these organizations are required to provide information on how this data was collected, or if it’s inaccurate, take steps to correct them.