Latest / Market Pulse / Mortgage Industry Evolution: Data, Transparency, & the Future of Lending

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Mortgage Industry Evolution: Data, Transparency, & the Future of Lending · Market Pulse

• 0:02
  Welcome to a special edition of Market Pulse from Equifax,
• 0:05
  where we break down what's shaping the mortgage industry today and what happens
• 0:09
  next.
• 0:14
  Hi, I am Clayton Collins and the CEO at HousingWire,
• 0:17
  and I'm here at MBA Annual 2025 in Las Vegas, Nevada.
• 0:22
  Joel Rickman, Equifax, Justin Demola, Lenders One.
• 0:25
  Thank y'all for joining me for this conversation about the future of lending
• 0:28
  data and a few other topics we're going to tackle head on.
• 0:30
  Sounds great.
• 0:32
  All right.
• 0:32
  So we're going to jump straight into this at this event and most conversations
• 0:37
  for the last couple months,
• 0:38
  FICO's new direct lender program has gotten quite a bit of
• 0:43
  airtime, the front pages of housing wire mm-hmm .
• 0:45
  Social media the main stage in general session here at the MBA event.
• 0:50
  Let's tackle that head on. And Justin, I'm going to start with you.
• 0:53
  You represent Lenders One,
• 0:54
  you represent a lot of independent mortgage bankers who are members of Lender
• 0:58
  One. Lenders one. What are they talking about right now?
• 1:01
  So, it's interesting, right? So the,
• 1:04
  the announcement came out and my phone started blowing up,
• 1:06
  and it was members customers asking us what's going on, right?
• 1:10
  Our credit customers and our non-credit customers. Yep.
• 1:12
  And the simple answer initially was, we don't know yet. Right? We, we,
• 1:15
  we understand what the words say,
• 1:17
  but we don't know how they're going to be applied and how this is all going to
• 1:20
  play out. Yep. So I've had many conversations with our clients,
• 1:24
  and the, at the end of the day, it's driving prices up, right? So,
• 1:29
  while FICO in theory didn't raise their prices,
• 1:32
  prices are getting raised across the board because it's,
• 1:36
  it's natural progression, right?
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  All these companies that are involved in the credit reporting world are publicly
• 1:42
  traded entities. They have shareholders they have to re respond to,
• 1:46
  and they have demands, you know, for, for ROI and earnings per share.
• 1:50
  But it's a business, right? We're not, we're not here to, you know, to,
• 1:53
  to give everything away for free. However, you know,
• 1:58
  companies like Equifax have come out early with the pricing and, you know,
• 2:01
  they've,
• 2:02
  they've put a line in the sand that they're going to honor the pricing and,
• 2:05
  and keep it where it is. So when we look at, you know, FICO pricing today, it's.
• 2:10
  Just.
• 2:10
  About where we were last.
• 2:11
  Year.
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  So generally in business competition brings
• 2:17
  two positive dynamics. Mm-Hmm . Efficiency gains and pricing gains.
• 2:22
  What is different about this scenario, Joel? Like, why, why do you, like, if,
• 2:26
  if you agree with Justin,
• 2:28
  why are lenders concerned that pricing is going to go up when this is a, a,
• 2:32
  a move of comp competition?
• 2:34
  Well, I think that the concern or the reality actually,
• 2:38
  is that prices will go up if you are using the FICO score under the new model.
• 2:43
  Okay. And so some of the announcement was
• 2:47
  was difficult to follow, as Justin said in regards to the pricing model. We,
• 2:51
  we were not charging $10 for a FICO score.
• 2:54
  That's what was implied in the announcement. So that's fine.
• 2:58
  FICO is welcome to go to market. How they choose is best.
• 3:02
  The way I look at competition is that a lot of really great things have happened
• 3:06
  in the last two weeks. So if you look at Equifax, Experian, and tu,
• 3:10
  all of us have come out and said, okay,
• 3:13
  we are hearing loud and clear from customers. You want an option?
• 3:16
  We are hearing loud and clear from customers that we've gotta get some of the
• 3:21
  cost under control.
• 3:22
  So there's a lot of things we still don't have completely answered on, you know,
• 3:25
  exactly when Vantage will be fully accepted and some of those things.
• 3:29
  But every bureau not only committed to a price point and structure that will
• 3:33
  save the industry. Think about it.
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  If FICO's doubling their price and we're locking it at less than
• 3:41
  than half that price, we're saving the industry a lot of money.
• 3:44
  But not only that,
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  every one of the bureaus is putting something else on the table. So at Equifax,
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  we're committing to providing income and employment data from our twin database
• 3:53
  with every credit report. You know,
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  we saw Experian that's offering some of the data from Boost,
• 3:58
  and we saw that TU is offering the score simulator on Vantage.
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  All three of those are benefits to the industry.
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  All three of those are additional services being provided inside of the
• 4:09
  structure and the existing cost of the credit report.
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  And that's a win for the industry from a competitive point of view.
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  The other part that I think we haven't talked enough about is the score
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  comparison themselves is the Vantage Score is a much more modern score.
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  And, you know, I think FICO will get 10 T approved and they should, it's,
• 4:29
  it is the next generation,
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  but this competition is going to improve the scoring in the industry
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  and empower more people to get loans. And that's why we're all here. Yeah.
• 4:39
  If that's not our focus, then we're missing.
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  Justin Joel described Vantage as a more modern scoring. Is that how you see it?
• 4:46
  Is that how your members see it? Yeah.
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  I think, again, when we talk about competition brings innovation as well. Okay.
• 4:51
  And I think that's probably one of the biggest things that we're seeing here.
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  If companies like Equifax are innovating,
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  they're offering additional data at the time of initial pull.
• 4:59
  So when we look at Vantage Score and what our ultimate goal is for everyone in
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  this building is to increase home ownership, right?
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  Make home ownership more affordable.
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  So if Vantage Score has the ability to open up and unlock the ability for
• 5:13
  additional home buyers to,
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  to enter into home ownership and achieve the American dream, yeah, that's,
• 5:18
  that's great. And that's where I think we need to really start focusing on,
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  you know,
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  what can we do to get more people in homes and Vantage Score appears to have the
• 5:27
  data to be able to do that.
• 5:28
  I'm going to jump back a little bit here, Justin, so,
• 5:32
  and kind of set the stage for what your role in this conversation is. Yep. So,
• 5:35
  like, I know Lenders One is a cooperative. Tell us, like,
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  how do you come into to play here in the credit score ecosystem?
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  So, you know, Lenders One is a cooperative. We have 230 or so members.
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  We control about 20% of the US mortgage market on the residential side.
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  So we have members that do as little as $500 million a year,
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  and we have top five lenders. Yeah.
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  So everyone sees value in every in different things. And about three years ago,
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  we entered into the credit reseller space. And, you know, as,
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  as part of our organization, we have built products and,
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  and services for our members that give them the best value that they can get
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  and cost savings and, and customer service, what have you.
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  And so when we entered into the credit reporting space,
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  it was really to serve our members,
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  to be able to be aggressive with them in pricing,
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  give them different alternatives,
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  and really create different value for them than we can normally do.
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  If we went and brought a third party in, that was a middleman for us.
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  So because of that,
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  we've developed a great relationship with Equifax and I'm sitting here today.
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  So when you entered the credit reporting space as a, as a reseller,
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  was that at the at the request of, of members?
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  So we have an advisory council as well as a board. And, you know,
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  the advisory council is 16 members and they're CEOs of our membership.
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  And we sit in a room three times a year, four times a year. And we go through,
• 7:03
  well,
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  what challenges are they seeing and how can we be more efficient for them and
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  create value for them? Yeah. So one of the requests is what can, you know,
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  can you create more direct products and services that we can, you know,
• 7:16
  realize better savings throughout the process?
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  What were some of the
• 7:20
  priorities around credit reporting that that group of advisors shared with you,
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  and how, if it has,
• 7:26
  how has that changed in the last three years as we approached the market we're
• 7:30
  in now?
• 7:30
  Actually it's even more interesting than that. When we initially started,
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  we were sell reselling the work number for Equifax. And, you know,
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  we hit the ground running. We were very successful with that.
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  And our member said, okay, you, you're reselling, you know,
• 7:43
  we're reselling flood surges as well. You're reselling flood,
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  you're reselling verifications of, of employment.
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  What else can you start bringing in house to give us additional savings?
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  And that was really, you know, they pushed us to,
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  to create the credit reporting agency.
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  We have call it almost 30% of the members that are,
• 8:01
  that are running credit through us in just three years. And again,
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  as you're starting a new, you know, credit reporting agency in this space,
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  people are concerned on service.
• 8:09
  They're concerned on on is it going to be bait and switch?
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  Where are you going to be? So we are really starting to see, you know, the,
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  the trajectory of the hockey stick growth hitting it year three. Okay. And,
• 8:19
  you know, we just signed a top 10 lender that's, you know,
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  going to do tremendous amount of volume for us,
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  and we're really excited about that. And we're talking to three more.
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  So we're really doing well with it.
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  And, and how do those lender members think about, like,
• 8:32
  lender choice in credit reporting? Like, what's their feedback on the last,
• 8:37
  I mean, not that you control it, but over the last three months since the,
• 8:39
  since the Pulte announcement on Vantage Score in July. Like, what's the talk?
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  It's not just credit reports, right?
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  Our members expect us to be able to give them options so they can choose what's
• 8:49
  best for their business at any particular time.
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  So when we talk about Vantage Score and we're talking about, you know,
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  any of these other ancillary credit products,
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  how can we create value earlier in the process for them, whether it's, you know,
• 9:02
  soft polls and, and how they're going to use their UDN versus refreshes,
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  whatever, whatever's best for them. That's,
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  that's all we can do is present to them the products and services that we offer
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  suggest to them based upon, you know,
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  looking at their prior invoices and their TER ratios and,
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  and how they're using the products and services.
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  We'll go down and we'll sit down with them and say, okay, if you do this,
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  we could save you this much money, and if you do this,
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  we could save you this much money. And that's what they love about who we are,
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  is that at the end of the day, we give them the optionality.
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  So everyone's super excited about, you know, the possibility and,
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  and I wouldn't even call it a possibility any longer, you know,
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  the release of Vantage Score into the wild.
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  Now we just need to figure out how do we get Vantage Score accepted across all
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  the products so the members don't have different bone manufacturing processes
• 9:50
  for different products. Yeah.
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  Joel,
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  do you want to add to that on loan manufacturing and how you all think about
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  like helping these lenders bring Vantage Score into their product suite?
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  Absolutely. Well, I think, you know,
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  loan manufacturing from the economies of scale and,
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  and general economics has changed a lot in the last few years.
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  And 2020 and 2021, 1 in two, one in three applications got closed. Yeah.
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  So people were a lot less worried about these things.
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  And it was very common that as soon as that application hit,
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  people pulled a full tri merge, hard pull, ready to go.
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  And if that person qualified from credit,
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  they pulled full income and verification so that they could give a hard offer
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  right there immediately. Day one. As the, you know,
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  as the market has changed and conversion rates are going to one in five,
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  one in seven, one in 10, for some lenders,
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  that cost upfront has become something they're looking to get more control over.
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  And they were doing that a lot of different ways. And,
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  and we're working with clients today about how do you automate your process in a
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  more efficient way. So Vantage Score is absolutely part of that.
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  If you think about that shopping behavior early on where you have so much
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  fallout, there's alternatives that you can do with a Vantage Score and a,
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  you know, a non trended credit file that drives a lot of savings.
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  And we see that in the world today. A lot of lenders start with a single file,
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  and if you're in the right range of lending,
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  then they'll add the second or the third.
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  The reason they do that early in the process is because they've learned that
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  there's still enough difference between the bureaus that they want to be able to
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  price that loan correctly and not have to have that hard conversation.
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  So real quick, and,
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  and the other piece that we're adding there is the verification of employment
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  and income. We know that it's extremely valuable and required.
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  We also know that it is pricey at times if you buy it really early and you have
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  the fallout.
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  So some of the things that we're providing with our credit report now around the
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  income information will allow lenders to automate their process and wait until
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  that loan is committed to know,
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  to pull that correct record and move on with the process.
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  I mean, the way you like.
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  Described that of helping.
• 11:50
  Re-Engineering the process to help lenders find more savings and cost efficiency
• 11:54
  with how they pull credit at early stages or preapproval sounds pretty
• 11:59
  straightforward. But like, when you, when you go out and,
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  like at this event or I talk to originators on,
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  on the phone or on text or on social,
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  the frustration levels are still pretty high, like on, on cost structure.
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  And I,
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  I don't know if there's more education that's needed on how loan originators
• 12:16
  need to change process to, to bring more cost efficiency,
• 12:19
  or if there's a secret sauce that the two of you are sitting on there,
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  everybody else doesn't know.
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  But there's still a lot of confusion and frustration out there that I hope that
• 12:27
  we can bring a little bit of light to right now. If we can do that.
• 12:30
  I don't know that that's necessarily a secret sauce per se,
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  but there's absolutely best practices and ways to help lenders.
• 12:37
  Well, let's get a few of those. What are some of the best practices?
• 12:39
  Well, it's exactly what we were talking about. Okay. Understand your flow,
• 12:41
  buy what you need when you need it, and do that with the intelligent of the,
• 12:45
  of the data to help you understand your process. And that takes an education.
• 12:50
  You hit it, you hit the nail on the head when you said,
• 12:52
  do we need to educate more? That's exactly what we need to do.
• 12:55
  When I talk to our sales team and our partners,
• 12:58
  teams that work with Justin and his folks,
• 13:00
  we talk about we've gotta become better solutions servicing sales folks.
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  We have to talk about the pain point and how the solutions can help
• 13:10
  alleviate the pain without giving up safety and soundness in the process.
• 13:15
  So you mentioned buy what you need when you need it.
• 13:17
  In the general session earlier today, there was a audience question of like,
• 13:21
  all right, so what if I buy a single report, it doesn't hit the,
• 13:24
  the credit score that we anticipated.
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  Now do I have to go back and pay for the all, all three reports? And like,
• 13:29
  so how do, like,
• 13:30
  how do lenders need to build technology or process into their flow so they can
• 13:33
  buy what they need when they need it efficiently?
• 13:36
  You know, I'll start with that. First of all,
• 13:38
  I think we overcomplicate this business, right? So been doing this for 33 years,
• 13:41
  started on the origination side of the business.
• 13:44
  Just start when you were 14 mm-hmm.
• 13:45
  . I love you. I love you. So thank thank you. It was, you know,
• 13:49
  family business and I got thrown into it at a young age. It might have,
• 13:52
  it might've been 14 .
• 13:54
  I was turning a wrenches in a mortgage broker office at 14,
• 13:57
  helping my dad build desks. Well, I was right there with bonus.
• 13:59
  1, 2, 3, and banker's boxes. We'll just leave it at that.
• 14:02
  So we overcomplicate this business, right?
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  And I think when we talk to our members and, and it's, it's really common.
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  Every single member we talk to,
• 14:12
  the sales person likes to do it this way. They're a producer.
• 14:16
  So if they're producing, I'm going to let them do it the way they want. However,
• 14:20
  that doesn't really work well when you're trying to create efficiencies and
• 14:24
  reduce costs. Yeah. So what we're seeing is, you know,
• 14:27
  the companies that are really succeeding in developing the technology or the
• 14:30
  workflows that make sense are the ones that are, you know,
• 14:33
  I don't want to say mandating it, but are,
• 14:35
  but are creating these best practices at the top of the house Yep.
• 14:38
  And then having it flow down.
• 14:39
  So that's why you're seeing these larger companies that are more efficient.
• 14:43
  The cost to produce a loan is less than the local IMB, right?
• 14:47
  Because local IMB IMB is generally has maybe have three or four different
• 14:52
  processes and there is no way to be a, you know,
• 14:55
  perfect in all three or four of.
• 14:56
  Them. The other thing I would touch on is it does have to do with the technology
• 15:00
  layer. So, you know,
• 15:01
  Justin and his company's invested in building a technology layer to help with
• 15:05
  some of that decisioning, but we're seeing that across many of the LO's,
• 15:08
  they have enhanced the workflows and the capabilities of those workflows to
• 15:13
  where you can now start mapping that out.
• 15:15
  And that's where we want to spend a lot of time this year,
• 15:18
  is helping invest to drive those processes to where you can get what the
• 15:24
  los need to be successful. But as running the shop head of operations,
• 15:28
  you can hard code some of that from a workflow perspective to where the LO
• 15:33
  shouldn't have to go off track to get that information. And.
• 15:36
  With that workflow innovation is that like now that we've, you know,
• 15:39
  the last few months we've entered this lender like choice scenario mm-hmm
• 15:42
  . Are those workflows changing as we speak? Is that, is that hard.
• 15:46
  Or that simple every day? That's simple.
• 15:47
  Every.
• 15:47
  Day. Okay. Alright. Well, I mean,
• 15:48
  look at all the new technologies that are out there, right?
• 15:50
  Everyone is trying to put these widgets into their system and half of 'em are
• 15:53
  sitting on the shelf. because No one knows how to, how to use them. Okay?
• 15:57
  So we need to figure out, as an industry, and,
• 15:59
  and Joel and I have had these conversations offline,
• 16:01
  like creating technologies and using AI to really take a loan
• 16:06
  through the process and shepherd it through the process with as little human
• 16:09
  intervention and, and decision making as possible. Right? Okay.
• 16:12
  Because at the end of the day,
• 16:14
  if you continue to allow people to do different things,
• 16:16
  even with technology and stops,
• 16:18
  they figure out a way to call the IT help desk and say,
• 16:21
  can you override this for me? Or can you do that? I mean, to me,
• 16:27
  every loan officer in this business should be able to identify whether or not a
• 16:31
  borrower qualifies from day one. Right. And if you're not selling rate,
• 16:35
  which everyone says you shouldn't sell rate, you know,
• 16:37
  borrower qualifies like an issue, a pre-approval move on.
• 16:40
  And then as the borrower gets serious,
• 16:42
  then you could start looking at SLU products and services that will help you get
• 16:46
  to a rate for that borrower. Okay.
• 16:47
  And when you talk about the changing workflow, it don't, I mean,
• 16:50
  there's so many variables out there. Are you buying a condo in Florida, ?
• 16:53
  Yep. That becomes a whole different challenge.
• 16:55
  Versus are you refining a house with 50% equity? And, you know,
• 17:00
  it's so much different in that experience with some of the automation,
• 17:03
  some of the decision and some of the data upfront.
• 17:06
  You can help build out a process that really streamlines the flow per the type
• 17:11
  of loan. And that's driven by data. It's not driven by building a workflow.
• 17:15
  It's driven by having the right data at the right time.
• 17:18
  And it we're not just talking about credit report products.
• 17:20
  I mean even appraisal processes, right? Yeah.
• 17:22
  Like CU score is under two and a half.
• 17:24
  Like why are you having people look at that?
• 17:26
  We met with Fannie not too long ago.
• 17:29
  CU scores of five have a one in 10 chance of being repurchased CU scores have
• 17:33
  one, have a one in a hundred thousand chance of being repurchased for collateral
• 17:36
  purposes. So why waste time on an appraisal with, with a low C score?
• 17:40
  Okay. So we're talking about efficiencies. Yep.
• 17:42
  Like we're not just talking about credit reporting here at NB,
• 17:44
  there's a lot of talk about machine learning, ai, other process improvements.
• 17:48
  Justin, where is your member focus on gaining efficiency?
• 17:53
  And I asked that through the lens of like,
• 17:55
  I have this like holy grail view of the industry that we can like build a
• 17:58
  profitable ecosystem that can actually drive consistent margin.
• 18:01
  And I think you're aligned in the same direction a.
• 18:03
  A hundred percent.
• 18:04
  And what I'll say is I think we gotta bifurcated two different ways, right?
• 18:07
  Yeah. You have your,
• 18:08
  your sales efficiency and then you have your loan manufacturing efficiency.
• 18:12
  And we're seeing a lot of our members are really pushing on the sales
• 18:15
  efficiency. How do I get an AI bot to, to take an application,
• 18:19
  work with a borrower, you know, answer questions. That's great.
• 18:23
  And I think there's a lot of different solutions that are doing it.
• 18:25
  I'm still a little skeptical about that,
• 18:27
  especially because we're seeing some states push back on what's a licensed
• 18:31
  activity versus a non-licensed activity.
• 18:33
  We're really focusing on the loan manufacturing aspects. Okay. And we're,
• 18:36
  we're creating AI internally that will help manufacture a loan in small
• 18:41
  little widgets and modules, right?
• 18:43
  Breaking everything down in the simplest form and then getting it success,
• 18:46
  whether it's three tasks or we have, you know,
• 18:49
  a collateral review checklist of 150 questions. Whatever it is,
• 18:53
  we're going to break it down and then we're going to, you know,
• 18:55
  provide those solutions to our members to reduce the time it takes to
• 19:00
  look at or review, you know, the appraisal checklist.
• 19:03
  We got it down from an hour 45 minutes roughly to less than 10 minutes.
• 19:08
  Okay. So create, you know, great efficiencies for,
• 19:12
  for staff to look at it and say, okay,
• 19:13
  I only need to look at three questions on this because everything else is making
• 19:16
  sense.
• 19:17
  All right. So we talk about data and ai. Joel,
• 19:20
  like how is Equifax kind of fit into this new AI fueled
• 19:25
  ecosystem?
• 19:26
  Oh, wow. Well you know,
• 19:27
  we have a great team that's been working on AI and we've been getting patents on
• 19:31
  explainable AI for a number of years now.
• 19:33
  So we've leaned in very hard from that perspective.
• 19:36
  And it's really around automating, you know,
• 19:39
  the quality of data and how we bring data in and how we look at it. Okay.
• 19:42
  But we're also having a lot of fun building out new models and new alternatives
• 19:47
  using AI that allows us to help clients generate a custom model,
• 19:52
  test it and validate it in days now versus what used to take months for years in
• 19:57
  some, in some worlds. So, you know,
• 19:59
  part of that's with the investment we've made moving to the cloud.
• 20:02
  So we now have access, you know, to almost unlimited processing power,
• 20:06
  which allows you to do those simulations very quickly. The other part is in,
• 20:10
  during that investment is we keyed and linked all of our data so that we can
• 20:14
  look at a individual and understand everything about them from their
• 20:19
  telco and utility information, their credit score, their income and employment,
• 20:23
  all of those things to make decisions and evaluate models much faster.
• 20:27
  So I know like one of the other stress points in the industry is like dropping
• 20:30
  conversion rates. Mm-Hmm . And like as you.
• 20:32
  Talk about.
• 20:32
  Surfacing more consumer data lenders can make better actionable decisions
• 20:37
  faster. Is that a,
• 20:39
  a strategy that helps combat declining conversion rates? Or like where does,
• 20:44
  like where does that fit into the conversion challenge? You.
• 20:45
  Know, I'd love to say yes, Colin? Clayton. Clayton. Clayton. Sorry.
• 20:49
  I, I bet done my best not to mix up Joel and Justin on this one.
• 20:53
  But the JS just cost the js.
• 20:55
  Oh, I am so sorry. I'm so sorry, Clayton. So the,
• 20:59
  the reality is we are doing things that improve all of those things,
• 21:04
  but the industry's changed a lot. So there is a lot more marketing,
• 21:08
  there's a lot more energy. So every time the rates fluctuate,
• 21:11
  huge amounts of volume come in for people looking to say, Hey,
• 21:14
  did I qualify to save a few bucks?
• 21:17
  And a lot of times it hasn't moved enough for them to justify making that
• 21:21
  change.
• 21:22
  So that's part of it is we're getting a lot more people into the top of the
• 21:25
  funnel to evaluate whether they want to do a new loan.
• 21:28
  And then that is hard to overcome because the numbers are still the numbers and
• 21:33
  affordability is really tough when you look at it from income,
• 21:37
  employment and credit data.
• 21:39
  It's still such a small part of what a consumer has to spend on closing
• 21:44
  costs, yet alone.
• 21:45
  The cost of the loan with housing prices that have gone up so much since 2020
• 21:50
  with insurance, with title, with all of those things, it adds up.
• 21:53
  And affordability is, until affordability gets better,
• 21:57
  the reality is the conversion rate is going to continue to struggle.
• 22:00
  So the question is,
• 22:02
  can you figure out affordability earlier in the process and coach your customer
• 22:06
  to come to a conclusion before you go through the entire process?
• 22:10
  I'd say that's a until affordability gets better as a pretty like glass
• 22:15
  half full kind of mentality that I, I don't see a,
• 22:20
  an economic or industry driver that like actually improves affordability in a
• 22:24
  meaningful way.
• 22:25
  Oh, just because I called you by the wrong name,
• 22:26
  we're getting a little touchy .
• 22:30
  Hey boys, boys. I'm going to throw,
• 22:32
  I'm going to throw another monkey wrench into this. Oh,
• 22:34
  Poulter rates to Joel's point. Yeah. Yes. I don't qualify for a lower rate.
• 22:39
  I have to wait. But I think the,
• 22:41
  one of the biggest things that we're seeing is two things here is one housing
• 22:44
  supply. Yeah. Right? I want to buy a house mm-hmm .
• 22:47
  But there's not a house I like or it needs too much work or I can't afford it,
• 22:50
  but there, or it's not in the right location,
• 22:52
  not location where people are doing.
• 22:53
  The return to office thing.
• 22:54
  Or there's, or there's five bids on the house and I lost it. Right? So you're,
• 22:57
  so housing supply is a real big factor in, in pulter rates.
• 23:01
  And then the other thing is competition, right? So competition amongst imbs,
• 23:05
  Hey, I'm going to a barbecue tonight. And, and Joel says, Hey,
• 23:09
  I I just got a loan through a BC mortgage company. Oh, I just locked in with,
• 23:13
  with X, Y, Z mortgage company.
• 23:14
  Well you need to call my guy because my guy's going to give you a better deal.
• 23:17
  So you see a lot of that as well, right? Yeah. And I, you know,
• 23:20
  I think that the mortgage industry, while we have so much data available to us,
• 23:25
  we don't use it as much as we should. 10% of what we should.
• 23:28
  So in order to really understand what the pull through rates are,
• 23:32
  we need to understand why these loans aren't closing.
• 23:34
  And then we can then feed the system to understand and predict what's going to
• 23:39
  close and why it's going to close and how it's going to close or,
• 23:42
  and what the timeframe is. Is it 90 days, is it 60 days? Whatever. It's.
• 23:45
  So the other area that will, and, and I didn't get through my whole question Oh,
• 23:49
  sorry. Or my whole answer before I got got prodded there,
• 23:51
  but I appreciate it is it does have something to do with the scores.
• 23:55
  If you look at the scores,
• 23:56
  there's still a lot of people that don't qualify or they're qualifying into a
• 23:59
  loan that because of where their credit is at the terms that loan are just not
• 24:04
  affordable for them as more data becomes available.
• 24:08
  And some of that data is directly off the credit report.
• 24:10
  Some of that data is utility data or stronger income data.
• 24:14
  Better decisions can be made to help qualify people in. You know,
• 24:18
  I've experienced firsthand with my son who's 25 years old,
• 24:22
  he has plenty of cash for the down payment, has almost zero debt, has,
• 24:27
  but only has two credit cards.
• 24:28
  He doesn't score out well in the traditional model,
• 24:31
  but he could easily afford a decent house.
• 24:34
  But now he's sitting on the sideline because he's kind of stubborn until he gets
• 24:39
  that credit score up and added a couple of trade lines so that he gets a rate
• 24:43
  that he's comfortable with. And so there is no single threaded answer.
• 24:47
  The key is if we,
• 24:49
  it's going to take a lot of little things to help the help drive things overall.
• 24:53
  One is the items Justin talked about around availability of housing.
• 24:57
  Part of it is,
• 24:58
  do we get the best pricing on a loan for individuals through more data?
• 25:03
  And then other components come down to what happens in the the macro economic
• 25:08
  world.
• 25:08
  Yeah. Do think, sorry, sorry to cut you off,
• 25:10
  but when we talk about interest rate and your son is waiting for a better
• 25:13
  interest rate, there's no guarantees. Right? A hundred percent. And,
• 25:16
  and that's the conversation that the better loan officers need to have. It's,
• 25:19
  you know, it's a burden of hand.
• 25:22
  Oh, I, I agree with you. So dad,
• 25:24
  dad's telling him to go get the house Of course. And refinance it.
• 25:27
  That goes back to, that goes back to education.
• 25:30
  Like if we do get better rates,
• 25:31
  like I think the data tells us we're going to see home price appreciation and
• 25:34
  like the, the actual PITI doesn't really move favorably.
• 25:41
  It, it all depends. No, I'm not going to predict the future for you. Yeah. I,
• 25:44
  I won't do that because it changes daily.
• 25:46
  But we are at a highly frictionless spot in the industry right now. Yeah.
• 25:51
  Both on affordability, on the monthly payments,
• 25:55
  on the cost of housing and all of the components around it.
• 25:59
  And it's a highly competitive,
• 26:00
  I think everything Justin talked about from the competitive nature is a big way
• 26:05
  in, in the environment of how do you pull those through.
• 26:08
  So our focus at Equifax and only speaking of Equifax,
• 26:11
  is we're trying to provide that more data.
• 26:14
  We're trying to provide more cost effective options at application.
• 26:18
  Mm-Hmm .
• 26:18
  For a lender to be able to make a good decision to understand what path
• 26:23
  a applicant might take through the process. And that's, that's step one.
• 26:27
  And the other steps all come into play in regards to can they find the right
• 26:32
  house? Do they have the right terms?
• 26:34
  Can we get them into the right type of loan based on their situation?
• 26:38
  That's where the professional mortgage broker really comes into play to help
• 26:42
  them through the process. And Justin's right as well from that perspective.
• 26:46
  You know, my son would be much better off to find the house now,
• 26:49
  buy it and refi and we're working on him and we'll get there .
• 26:53
  But that's his mentality. And so, you know, not everybody has a,
• 26:57
  a parent or a friend that's coaching them to move forward. They go, they try it,
• 27:01
  they don't like what they see and they go sit on the sidelines for a year and
• 27:04
  there's a lot of that happening.
• 27:05
  Right?
• 27:05
  And then a year later the rates are higher and the house is more expensive,
• 27:08
  and they go, oh no, I should have went back a.
• 27:09
  Year ago. And that's what a lot of lenders, and,
• 27:11
  and I really appreciate a number of lenders out there that invest out of their
• 27:15
  own pocket with score simulators and score coaching to help people
• 27:20
  get better. We've got a number of our clients that do that and invest in it.
• 27:24
  And that is a step in the right direction. That is a, you know, it,
• 27:28
  it's helping every little step. Like I said,
• 27:30
  this isn't something we're going to solve overnight.
• 27:32
  This is one that a lot of little steps combined are going to turn into big
• 27:35
  steps. Yeah.
• 27:36
  I mean,
• 27:36
  we opened the conversation talking about pricing around credit reporting.
• 27:40
  Mm-Hmm .
• 27:41
  We're talking now about how better data can fuel sharper pricing as well as an
• 27:46
  expanded credit box. There's a big lender benefit. Yep.
• 27:49
  As we kind of wrap up the conversation, do,
• 27:51
  do we think that better data is going to help consumers and,
• 27:55
  and flow through to this,
• 27:56
  this first time home buyer or repeat home buyer who's going back into the market
• 28:01
  and going through a mortgage process?
• 28:02
  It looks a little bit different than last time they did it.
• 28:04
  I a hundred percent believe that. And we have studies and,
• 28:07
  and data that show that. So if we start at the,
• 28:10
  we'll start at the score and say scores that include more information.
• 28:13
  So rental, okay. Telco,
• 28:16
  utility bills plus your traditional trade ones,
• 28:19
  those scores are going to help people qualify, especially your new buyers,
• 28:22
  your thin files, your newer to credit. It will make a difference.
• 28:26
  Then you move into,
• 28:27
  how can I eliminate risk and fraud when it comes around employment and income so
• 28:32
  that I, as a lender,
• 28:33
  I'm not taking on additional risk or you don't have additional risk flowing into
• 28:37
  the secondary markets that helps reduce interest rates. Okay.
• 28:41
  All of these things working together will absolutely help drive more
• 28:46
  adoption and, and success for the industry.
• 28:48
  But it's not one thing by itself that's going to be a magic bullet.
• 28:52
  Yep. I, I second everything Joel said. I mean, the data is,
• 28:56
  can only be valuable. Right. And we can use the data to educate our lenders.
• 29:00
  We can use the data to educate our borrowers,
• 29:03
  our future home bar home buyers and really use this data and,
• 29:06
  and as well as the, you know, the bond investors to say at the end of the day,
• 29:10
  you know, this loan will pay, it'll pay on time.
• 29:13
  It won't prepay or whatever's going to happen. So they,
• 29:17
  everyone can make the best decisions they can make to,
• 29:19
  to be able to get more affordable home ownership for everyone.
• 29:23
  Around. Awesome. Well, we tackled a lot in this conversation, gentlemen.
• 29:27
  This is fun. And I apologize for the name slip, but.
• 29:30
  Hey, we said we're going to make it spicy. We know we get spicy over names.
• 29:33
  We did, but.
• 29:35
  At least you didn't call me Joel. No, Joel.
• 29:37
  Justin.
• 29:38
  Hey we appreciate you doing this. And you know what,
• 29:41
  what we really wanted to accomplish here,
• 29:43
  and I thank both of you for coming to the booth and doing this,
• 29:46
  is we want to be part of the dialogue,
• 29:47
  just like you started this conversation in regards to what needs to happen.
• 29:52
  Education needs to happen,
• 29:53
  conversation needs to happen because what's going to happen next is going to
• 29:57
  change a lot in the next few weeks, the next few months, the next few years.
• 30:01
  And if we're not all working together and we're pitting against each other,
• 30:05
  it's going to be bad for the industry brand.
• 30:07
  And there's the old saying that, that that talk is cheap,
• 30:09
  but when you look at this environment, dialogue's incredibly important. It's,
• 30:12
  it's starting on, it's starting on X.
• 30:14
  We have or on what's former called Twitter. And and it,
• 30:19
  and it's flowing through to these conference halls and the pages of housing wire
• 30:23
  and news outlets around the world.
• 30:25
  So I think these dialogues make a really important educational impact on the
• 30:30
  decisions that people make and how priorities get queued up.
• 30:34
  Yep. And I want to give kudos to Equifax, Joel and his team. You know,
• 30:38
  they are out, you know, prompting the dialogue, having these conversations. Yep.
• 30:43
  You know, they,
• 30:43
  they want to have the conversations with the decision makers and the
• 30:47
  stakeholders and educate them on what they should be thinking about for downline
• 30:51
  effects. Right. You know, at the end of the day,
• 30:53
  it's the more information we have, the more data we have,
• 30:57
  the better decisions the policy makers and the GCs and whomever else is in the
• 31:02
  process can make their decisions on to help home ownership.
• 31:06
  Absolutely. Justin, Joel, thank you gentlemen. Thank you. Thank you.
• 31:09
  We appreciate it.
• 31:10
  The information and opinions provided in this podcast are intended as general
• 31:15
  guidance only, and are subject to change without notice.
• 31:18
  The views presented during the podcast are those of the presenter as of the
• 31:21
  date.
• 31:22
  This podcast was recorded and do not necessarily reflect official positions of
• 31:26
  Equifax.
• 31:28
  Investor analysts should direct inquiries using the Contact us box on the
• 31:32
  investor relations section@equifax.com.