Amidst the Impact of Interest Rate Movements, TransUnion Introduces New Solution to Better Assess Property Values
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Insights
The introduction of TransUnion's TruVision Consumer Property Insights for Portfolio Management could potentially reshape risk assessment practices for mortgage and home equity lenders. The tool's ability to provide real-time property value insights is critical in a market where tappable home equity has reached $19.7 trillion. This figure is a clear indicator of the vast amount of capital that could be accessed through home equity loans, which may surge if the anticipated drop in interest rates materializes.
Lenders equipped with accurate property value data can mitigate loan-to-value ratio risks, especially important when considering the fluctuating nature of property values. This proactive management of risk exposure could lead to a more stable mortgage and home equity lending market, potentially reducing the likelihood of defaults and foreclosures. Lenders who adopt this technology may gain a competitive edge by offering more tailored and risk-adjusted lending solutions to homeowners.
TransUnion's new offering taps into a significant market need for enhanced risk management tools amidst volatile economic conditions. The service aligns with current trends in data-driven decision-making within the financial sector. By utilizing combined-loan-to-value (CLTV) ratios and property characteristics, lenders can gain insights beyond traditional credit reports. This could lead to a more nuanced understanding of consumer behavior and asset valuation, allowing for strategic portfolio optimization.
As interest rates potentially decline, the demand for such insights could increase, with lenders seeking to capitalize on the home equity market's growth. This predictive tool might become an industry standard, potentially influencing stock valuations for companies that provide similar analytical services. TransUnion's move could also prompt competitors to innovate further, driving the industry towards more sophisticated risk management solutions.
From an economic standpoint, the availability of tools like TransUnion's TruVision could have broader implications for the housing market and the economy. By enabling more accurate risk assessments, lenders may be more willing to offer home equity loans, which could stimulate consumer spending as homeowners tap into their equity. However, this must be balanced against the risk of creating a potential bubble if too much equity is extracted based on inflated property values.
The tool's insights into property values and CLTV ratios could also influence monetary policy decisions. If lenders can manage risk more effectively, it may provide central banks with more leeway to adjust interest rates without as much concern for triggering a wave of defaults. The long-term implications for the housing market and financial stability will depend on how broadly and effectively these tools are utilized by lenders.
TransUnion’s TruVision Consumer Property Insights for Portfolio Management to help Mortgage and Home Equity lenders/servicers better evaluate and manage risk
CHICAGO, Jan. 10, 2024 (GLOBE NEWSWIRE) -- 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) today 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
“Both macro and microeconomic conditions and fluctuations can dramatically impact the value of a property, putting 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 for 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 five) 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, “We believe 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.”
To learn more about TruVision Consumer Property Insights for Portfolio Management, click here.
About TransUnion (NYSE:TRU)
TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good®—and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.
http://www.transunion.com/business
FAQ
What did TransUnion unveil to help lenders and borrowers manage risks associated with property value fluctuations?
What does the Q3 2023 TransUnion Credit Industry Insights Report show about tappable home equity?
How can lenders use the TruVision Consumer Property Insights for Portfolio Management tool?
What does the tool provide lenders with?
What is the anticipated motivation for homeowners to tap into available equity?
