Latest / Market Pulse / MBA Annual25 Day 1: Data, Innovation & the Future of Mortgage Lending
Transcript
- Rebecca Kritzman (00:43): Hey everyone. I'm Rebecca Kritzman. I lead our experience partner and mortgage and housing marketing team for our US business. I have the pleasure of being here with my esteemed colleagues, where we're going to talk about what happened at the show on day one. So we are super excited. This is a special edition of Market Pulse Podcast. So, with that, I'm going to do some other quick introductions with the team. I'm going to throw it over to Chris, because we have matching shirts on today to go ahead and do a brief introduction, and then we'll go to you, Tom, and then you Emmaline. Chris Mock (01:19): Thanks, Rebecca. My name is Chris Mock. I am Vice President of Sales for the work number. Been with Equifax almost two years, but been in the mortgage business for 30 years. It's great to be here. Rebecca Kritzman (01:29): And we appreciate you, by the way. Chris Mock (01:30): Thank you. Thanks for hosting us. Rebecca Kritzman (01:32): You're welcome. All right. Tom. Tom Ciulla (01:35): Tom Ciulla. I am senior Vice President for all of our reseller. And, and I manage the reseller channel here at Equifax. And I've been with Equifax a little over 10 years now. Rebecca Kritzman (01:45): And if you can't tell, Tom is from Boston. Tom Ciulla (01:47): And I'm from Boston. Rebecca Kritzman (01:48): He has a very thick Bostonian. Do I, is that right? Accent Bostonian. Yeah. Tom Ciulla (01:53): It depends. Rebecca Kritzman (01:53): Bostonian. Tom Ciulla (01:54): That's right. Bostonian accent, yes. Rebecca Kritzman (01:56): All right. Emmaline. Emmaline Aliff (01:58): I'm Emmaline Aliff. I lead the Equifax advisors and we study the economy, but not only that, we help to operationalize it for our customers. Rebecca Kritzman (02:06): Oh, operationalize. I love that. All right. We're going to get started with a really easy question. How was your first day at the show, Chris? Chris Mock (02:15): Yeah. Energizing. I've been coming to the MBA for since the mid nineties. And except for when we went through 2006 to 2008. And the excitement related to that, this is probably the first conference in a long time, where the buzz, the energy, the topics and what's going on in the industry was just a lot of excitement with everybody I spoke with today. Rebecca Kritzman (02:37): Why do you think that is this year? Chris Mock (02:39): There is a confluence of sweeping events. GSE reform, credit reports, customers now in year three or four trying to figure out what to do with margins and fallout. And you've had some big mergers that also happened this year. So just all those items have added up for a lot of healthy discussions. Rebecca Kritzman (03:02): Okay. All right. All right. Tom. Tom Ciulla (03:05): Similar to Chris, very energized. This is our big show Yeah. Every year. Right. And it's an opportunity to see all our partners. In, in my world all at once, right. And people are excited. There's a lot of looming change. There's been some interesting announcements prior to the show here that we're all thinking about figuring out together how we can operate in potentially a new environment. And so there's a lot of a lot of buzz about that. And it's a very exciting time, frankly. Rebecca Kritzman (03:36): How many meetings did you have today? I have to ask. Tom Ciulla (03:39): I had seven client meetings today. That's a lot so far. Yeah. That's good. Rebecca Kritzman (03:43): Yeah. Alright. Tom Ciulla (03:44): Got a full, full schedule tomorrow as well. Rebecca Kritzman (03:46): We're going to dive a little bit deeper on what you're hearing in those meetings. But, all right. Emmaline, how about your first day? Emmaline Aliff (03:51): This is my first day of my first MBA. Emmaline Aliff (03:55): Okay. Yeah. I've spent a lot of time in the non-mortgage space, of course, been peripherally involved in the mortgage space, just being in the role that I've been in, been at Equifax 16 years. And what I found very interesting and intriguing in particular is the balance that I saw between innovation and safety. And safety. What I mean by that is the, you know, doing the choice that we know is tried and true that we can trust, that we can have value in. And I think there's an opportunity, from what I heard today from a lot of people to do both. Rebecca Kritzman (04:30): Okay. Very insightful. So tell me about why, you know, because you go to a lot of different non-mortgage shows too, right? So what, what makes this special outside of innovation? Emmaline Aliff (04:43): Well, first of all, like, I have to say mortgage is absolutely hands down the most important asset class in our industry of financial services because you have it, it's, I mean, it's the primary place where we, you know, thinking about it from a human perspective, it's where we live. It's where you operate, it's where you like, it's beyond just like a level of it's a new credit instrument that I'm taking on. It's very personal. Rebecca Kritzman (05:14): You're going to make me cry. Tom Ciulla (05:15): Yeah. It's the most personal asset that an individual will. Emmaline Aliff (05:17): Yeah. Incredibly, incredibly. And I feel that energy coming through here a lot today. And what I'm particularly seeing is the, the ideal of heading towards an innovative perspective, meaning we want to do, and we heard this on our market pulse like webinar just two weeks ago, or last week, I guess. Rebecca Kritzman (05:37): Yeah. Emmaline Aliff (05:37): Last week. And it was the idea that we're craving, it was a craving is, and this is strong word innovation, and innovation is the opportunity to incorporate another score, for example mm-hmm . I see with your Vantage Score hat. And it just, it's the opportunity to look at how can we find ways to create, you know, when we think about additional scores being come in, it's not like innovation doesn't mean that only lenders benefit. Because you can, if you have better innovation, you have an opportunity to put someone in the right loan, not overextend their credit, but then also make sure that you're pricing it correctly according to the credit that exists. And we've seen that across the board. You know, when I, when I worked in like non-mortgage in particular, I have so many studies that I've worked on and incorporated that bring in a tribureau perspective. For example, because of the loading of data, the timing of the data, the differences of the data, even a score like vantage score is built on that perspective of incorporating information across the different data sources. So that's how I, that's how I would answer that question. Rebecca Kritzman (06:56): Alright. Cool. All right. So let's get to some most interesting things that you heard today. So Tom, I'm going start with you. Okay. Just because you're from Boston and I love Boston too. Tom Ciulla (07:08): So we’re going to exploit my accent. Okay. Rebecca Kritzman (07:09): Yeah. You had seven meetings. What's some of the most interesting things that you heard from our partners? Tom Ciulla (07:15): So it's a, it's actually a polarization of the MBA's endorsement of one bureau at the opening session this morning. And what I'm hearing from every one of my clients, which they're hearing from every one of their lender end users, right. Which is that they are all fully in support of maintaining trimerge. There is of course the issue of the pull through rate, right. Which is low right now. And we're hearing any, anything from 9% to 30%, right? So let's say somewhere in between 20% pull through rate, that means 80% of those loans, there's, there's dollars that are at risk there, right. That are straining their financials at the lender level. So, so that would be something that obviously we're all keenly focused on in saying, how can we innovate and come up with better solutions, right? That help our lenders not just run an efficient business, but ultimately help the consumer at the end of the day and make sure that we're putting the right consumer in the right home. Tom Ciulla (08:19): There's also a number of studies out there. Although there's, there are folks that are supporting one B, there are a number of studies that have been published by independent third parties and some that haven't yet been released, but that we're aware of or are being conducted. And we're really looking forward to seeing those results. And those really do support the fact that by using a Trimerge report, you're going to put more consumers in homes, and most importantly, the low to moderate income individuals, the LMI community. So by going with a single bureau, you're potentially really hurting those individuals. And Emmaline, you brought up a great point. Not only could you miss, and I've heard estimates of around 9% of individuals that otherwise would be, would've qualified for a mortgage, you might actually put an individual in a home in a mortgage that they really can't afford. Tom Ciulla (09:16): And that's even more damaging. So the need for more data is, is just critical in this process. And I think that, you know, with the topic of the FICO announcement, which is front and center for everyone right now, right. The excitement for me and for a lot of our partners is the idea of innovation. Right? And the fact that, you know, it's, it is going to force and trigger more innovative thinking and finding ways to really find solutions, you know, for these issues. Rebecca Kritzman (09:47): I'm sure you've had no shortage. Tom Ciulla (09:48): Yeah. And that's exciting, frankly. Rebecca Kritzman (09:49): Great conversations today. Tom Ciulla (09:51): We have absolutely. Fantastic. Awesome. Rebecca Kritzman (09:54): Chris? Chris Mock (09:55): I would say most surprising several customers said, when we talked about some of the things that we are doing with the report indicator, with income, qualifying with Vantage, with like, Equifax is innovating, aren't you? Tom Ciulla (10:09): Oh, yeah. We're in a fantastic spot. Chris Mock (10:10): So we are in a great spot to be able to have that robust dialogue where it's more than just a credit report, right? It is. You're adding some things to that file that can help me in the earliest stages of application to better understand where my borrower fits, what my borrower may qualify for. And oh, by the way, you're going to help me with my efficiencies and some processes. So the fact that they were recognizing that and say you are innovative was like, fantastic. It's fantastic. Rebecca Kritzman (10:42): Wow. Powerful. Chris Mock (10:42): Yeah. Very powerful. Yeah. Because you don't think of a credit file is being innovative, right? It's a list of accounts, it's a list of balances, it's a list of how you paid. But when you pair that with the data that we have, our customers that I spoke to today, they're getting it. They're getting it. Rebecca Kritzman (10:59): That's fantastic news. Yeah. All right. Emmaline, I know you attended some key sessions too, and you were in some meetings. What, what did you hear that was most interesting for you outside of what you've already kind of touched on ? Emmaline Aliff (11:11): Yeah, I think I touched on a bit of it, but I think the most, a lot of the most interesting things was you know, particularly, I had a very wonderful conversation with Amy earlier. Oh, you did? And Amy is one of the, you know, economists that we work with on a, you know, a very regular basis. And like the things that she was sharing specifically around going into the granular detail of like, this is the actual impact that would happen at a loan level decision. And then carrying that up into an industry level. I think, I think it's quite remarkable, especially if we think about, you know, the consideration of the, you know, things that, where things would fall out, for example. Like if, you know, say someone is at what point do they continue on with that loan or drop out from their own decision or the decision of the lender? And where are the things that that might exist either from an undisclosed debt perspective? And, you know, when you think about that, just the idea of stating undisclosed debt, that's just more data. And so anytime when you, when you know, and I'm a data scientist by trade, like I'm not in sales. But so I always think about Rebecca Kritzman (12:13): That wasn't a cut down by the way, . Emmaline Aliff (12:15): It was a compliment. Yeah. . But like, when I think about incorporating or trying to understand and make a decision, I want to bring in data and I want to understand what is the most data that's incorporated into that. And so I've heard a lot of things today, you know, foundationally around the things that Amy was sharing, but I also have heard peripherally other people sharing very similar things on bringing in data that would help you make the best decision, whatever that is. And I think that's what's encouraging to me is the idea that whether we have like, you know, three B, one B, two B, five B, whatever, you know, one score, two score, you know, in the non-mortgage space there are hundreds of scores. And so the amount of things that you can bring in from a that perspective, I think I'm encouraged mostly by the idea that we're trying to make the best decision for our business based on the ROI that could exist for that, but also with the responsibility to helping the consumer. Rebecca Kritzman (13:10): Let's, let's not hope there five B happens. Just kidding. , by the way, five B is five bureau. All right. So we talked about kind of what was most interesting that you heard today. So what was the most discouraging, I have to ask, right? The flip side, the most discouraging. And if not everyone has to answer, but does someone want to volunteer? Tom Ciulla (13:31): The most discouraging was the lack of attention to the studies that have been conducted in support of trier. Right. and that doesn't mean that, that the goal is status quo. And we can never change this. Right? I think change is definitely in our, all of our futures here. Right? And I think that's fantastic, but, but most of the focus was on, we think we can do it with one B, and we've seen it done, but there's not a lot to defend a lot of the other points that we've talked about, which is, how does that affect the low to moderate income individual, which are the ones that we're supposed to be serving most right now, right? To get as many, you know, folks to achieve the ultimate dream of owning a home, right? And to help that community. So, that was the most discouraging for me, I would say. Rebecca Kritzman (14:21): Helping people live their financial best. That's what we're all about, right? Tom Ciulla (14:24): That's exactly right. Rebecca Kritzman (14:26): Chris, I know you had something burning to say. Chris Mock (14:28): I did. And it was, there is, and we heard it in our customers discussion today, some of the things that may have been miscommunicated mm, inadvertently, I'm sure just led to additional clarifications that we were able to provide to our customers and our discussions. Whether it was round credit scores, whether it was round one B2B three B, that at a high level you say something. And that can be interpreted multiple ways. And it is incumbent upon us as salespeople, sales leaders, to be able to have that conversation with them to clarify any points and make sure you get to a level of detail so a customer can understand from this level. But here's how you actually would implement something like that in your organization. Because when it comes right down to it, whether it's one B, two B, three B, whatever it may be, our job is to make sure this is what it would mean when that lo is talking to a borrower and they're filling out an application. Here's what that means for you. Right. Rebecca Kritzman (15:26): Okay. All right. Emmaline, you said, you kind of whispered in my ear, but you said that I definitely have something to share about discouraging. Emmaline Aliff (15:34): I think there's a level of uncertainty with change or understanding information. And I think whenever there's a topic or, you know, change, like change is so constant, and wherever we are, I want to gain the most information about it and understand that from a data-driven perspective. And I think the part where I have some discourage is where I've heard the fear can overtake the idea of, you know, trying to make sure that we're understanding the best outcome, like for whoever that is. Whether that's you know, addressing things from a credit score standpoint, whether it's I guess not leveraging data to help you drive decisions. You know, some things we talked about was the comparison and contrast of you know, the way things like in the economist thing this morning around you know, administrative like differences. And whenever data is ignored through any process, you typically don't end up in the best place. And so I think in contrast to that is like, I think we need to go back to the data to help us make the decisions and to understand how do we reduce the uncertainty to make those decisions for really ultimately to serve the purpose that we, that we serve for helping people live their financial best. Rebecca Kritzman (17:02): I'll say a common thread of our conversation is the need for education. And that's why we wanted to talk about what happens next. Mm-Hmm. And, and have a platform for our partners and our customers so we could listen, right? Mm-Hmm . We can better comprehend, we can better educate. Because there is a lot of confusion out in the marketplace with recent announcements specifically. That's right. Yeah. So I think that's great. Does anyone have any parting words? Tom Ciulla (17:29): So you didn't ask us what was the most encouraging thing that we heard? Rebecca Kritzman (17:32): Well, I said most interesting, but yes, but please encouraging. Tom Ciulla (17:37): So the most encouraging thing was that we came to this show knowing that, that in, in my opinion, and most of our Equifax employees opinions, we are somewhat ahead of the curve, right? In innovation, right? Mm-Hmm . We didn't know that there was going to be this FICO announcement, right? But we were working on becoming the differentiated data provider in this industry, right? With income, qualify. With N-C-T-U-E data expansion, right. And other, and other things that we're working on. And that is super exciting to us because the person with the company with the, the most data at the end of the day wins. Right? the most encouraging thing for me is that every one of our partners feels the same way. And in almost every single meeting that I had today, our partners either led with or somewhere in the conversation they wove in that we've all talked about this and you guys are in the best position to wait. Mm. Right? And that to me is super, it's affirmation obviously, and it's super encouraging for me. So encouraging as an Equifax executive. Rebecca Kritzman (18:44): So thank you. Anyone else want to share the encouraging then? Chris Mock (18:47): I would just build on what Tom said. It was the number of discussions we had, knowing what we had been doing in the industry and communicating, they were like, tell me what I need to know. So because of all the work that we've done, because we've been out in the marketplace, to have somebody reach over and say, cut through the noise for me and tell me what I need to know and how you can help me. Yeah. Very powerful. Very powerful. Okay. Rebecca Kritzman (19:11): Thank you. Chris? Anything? Emmaline Aliff (19:14): Yes. Okay. So I think let's go. Yeah. I'm ready. So I think what encourages me the most is, and even in conversations with y'all is the idea of how much people care about the responsibility that we're given in this space to do. Like, and I think when we think about the fear of change or incorporating new data, like whatever that looks like, new scores, it's, what I've not heard is it's not anyone that's like, has an opinion, whatever that opinion is, it's never because they don't want to do the right thing. And I think this industry is uniquely aware of the responsibility that exists around making the right decision for the consumer, for the lender, for the ecosystem, for the country, even. Just because the amount of things that exist that surround itself around a mortgage or home ownership. You know, even thinking about coming from the non-mortgage side, I know for a fact that when someone purchases a home six months later, they try to buy a car. Tom Ciulla (20:32): Oh yeah. Emmaline Aliff (20:33): Six months after that. Yep. Or two, they get a new credit card. Yeah. Six months after that. And this is, and I'm saying these very specifically because it's truth with data that I've seen, they get a home improvement loan. This industry drives our economy in so many ways. And I think what I would say, what I'm encouraged by to carry it home is the amount of care that people have regardless of their personal opinion. Rebecca Kritzman (20:59): All right. Well that is a perfect way to wrap up the first day at MBA Annual with our special edition of Mark Pulse podcast. So thank you for attending, and we will be back. Emmaline Aliff (21:11): Thank you Rebecca. Thank you, Rebecca. Rebecca Kritzman (21:13): Thanks y'all.