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TransUnion Real Estate Services Launches Consumer Finance Division
By James Comtois
As part of a plan to address the growing needs of subprime mortgage lenders, Chicago-based financial services firm TransUnion has launched its consumer finance division.
"Our many years of experience in the real estate settlement services industry has led to an understanding that the processes and products needed to underwrite subprime loans are unique," said Richard Hogendorf, group vice president of TransUnion Real Estate Service's Consumer Finance division. "For this reason, we now have a committed focus around helping subprime lenders give consumers with imperfect credit the ability to achieve the dream of home ownership or obtain a home equity loan to fund other major purchases."
With the objective of helping customers to grow business, manage risk, reduce costs and improve loan application closing cycle times, TransUnion Real Estate Service's Consumer Finance division offers the following services to subprime lenders: customized lead generation, pre-qualification reporting, professional appraisals, valuation quality review and fraud and identity management.
With customized lead generation, lenders will be able to reduce marketing costs and achieve better returns on direct marketing investments through the integration of TransUnion's proprietary automated valuation model, Collateral Market Value, into its Instant Prescreen and Acquisition Triggers offerings. Pre-qualification reporting allows lenders to qualify potential borrowers cost-effectively by using TransUnion's Pre-Decision Qualifier to obtain a property value range before ordering a full appraisal.
Additionally, lenders receive objective appraisals with quick turnaround times from TransUnion's nationwide network that includes both staff and fee appraisers. TransUnion's CMV can be used as a quality control tool for incoming loans from correspondent lenders and for other underwriting purposes.
Finally, subprime lenders can combat the recent growth in mortgage fraud related to property flipping and application fraud by utilizing the irregular sales indicator that is part of PDQ and TransUnion's Fraud Management Platform for identity verification and authentication.
In 2004, the number of subprime loans increased 55% over the prior year according to SourceMedia's Electronic Mortgage Industry Directory. In 2005, the subprime segment originated $580 billion in loans, representing 20.7% of the overall residential loan market. "There is clearly tremendous opportunity here for settlement services companies to help manage the growing needs of this segment," said Mr. Hogendorf.
The new division was announced at the MBA's Subprime Lending and Alternative Products Conference in Washington, D.C.
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