00:12From Chicago with HousingWire, I'm Alison LaGuardia and I am sitting down with
00:17Experian's Michelle Boda, the Group President Experian Housing Verification Solutions and
00:23Employer Services. Hi, thank you. Hi Michelle, I'm so excited to have you. I'm really excited to be
00:29here. Now Michelle, the mortgage industry has been talking about modernization for years. What feels
00:37different about where we are today? I think today feels incredibly different because we're actually
00:43in the moment where we're letting the data and the changes and everything speak for themselves
00:48instead of all of us talking about what it might be or could be, speculating, hearing people positioning
00:54different things and everything. Now we're actually letting more modern scores get into underwriting
00:59and help price loans and go all the way through to securitization and we're letting the scores and
01:05the data and everything else actually speak for itself instead of us talking about it. So that
01:08feels like a ginormous moment to me. So you mentioned the data speaking for itself. Yeah. As more
01:15information becomes available, how should lenders think about what better data actually means? Yeah.
01:21I think this is a really important conversation because a lot of times people end up talking about
01:26more data and I don't think it's about more data. I think it's about the right data at the right
01:31time
01:31in the underwriting process. And so what you're hearing us come to this conference this week and
01:37talk about is how we can supply that at the right time in the process. You don't need everything all
01:42at once. You don't need everything on initial pull and we'll help facilitate getting it into the
01:47originator's hands at the right time. The other thing is consumers live their financial lives a
01:52little differently now than they did before COVID for sure, but like 10 years ago or 20 years ago when
01:58a lot
01:58of underwriting processes went into place. And so there's data that's important now to be able to
02:04evaluate things like how you pay your rent, things like buy now pay later that didn't even exist before
02:11that are now becoming part of like the available record of how somebody pays their loans, things like
02:16how they pay utilities and streaming services and things along those lines. I think it's really important
02:22to remember that a thin traditional credit file does not necessarily mean a thin financial life
02:28and that's something that I think the mortgage industry is starting to really embrace and
02:32understand. It's our responsibility as one of the primary data providers to make sure we can make all of
02:38that available so that we're best representing the consumers. And I kind of hate calling people that
02:43so that we're best representing people in the process of trying to get into a home with the right data
02:49at the right
02:49time. Now, Michelle, we're at an interesting place because we also see that consumers seem to really be
02:57paying attention to these changes as well. What are they telling you about what they expect from lenders?
03:03Yeah, we just did a survey. So we just did a consumer survey within the last couple of months. And
03:09what we
03:09found is that about 33% of consumers have said that they want their full financial life represented. And if
03:17a
03:17lender is not utilizing scores and processes that take all that into account, they will switch the
03:23process to one who is. That number goes up above 75% to about 76% when you look at
03:29adult Gen Zs, which
03:31is the next round of buyers that's coming at us, right? So they fully understand that the industry is in
03:38this moment where we're figuring out how to use different data elements for how people live their lives
03:43today. And I think that that's going to become one of the new competitive moments in an underwriting
03:48situation is, are you using the data the consumer expects you to use and the consumer knows you're
03:54allowed to use? Interesting. I was shocked. Yeah, I was really surprised. Aside from the shift to modern
04:01scores, where are you already seeing modernization make the mortgage process simpler? We're seeing a lot of
04:09evolution in terms of how originators and others in the process get access to data at the right time,
04:14like I was talking about before. So one thing, for example, is we just launched this morning,
04:19our Power Profile Plus solution, which has been in market for a couple of years and is very widely
04:24adopted, where you can pull the credit data at the beginning of the underwriting process.
04:29It posts a soft inquiry, so it doesn't affect a consumer score or anything like that. Good for the
04:34consumer, good for the originator. And then when you're further along in the process, you can convert
04:38that inquiry to hard and fund the loan and finish it. What we launched today was the ability to do
04:44it
04:45pulling just the credit data and an initial score, maybe Vantage score 4.0, for example, and only pull
04:51another score later in the process if you need it. So if the loan is converting to a different type
04:56of
04:56investor, or you don't you decide further in the process, you don't want to fund using Vantage score,
05:01and you want a different score, you can pull it later and not pay for the credit data again.
05:06And so we're seeing evolutions like that happen. We're also really excited because Experian's been
05:12investing in the verification of income and employment space for a while. We are very much
05:17challenging this market, trying to drive innovation into it, drive competition and options for folks
05:23who verify income and employment. And just this week at Workday's conference, they're actually launching
05:29their new partnership with us. So we're bringing a lot more records into the process. And what I want
05:32to say to everybody who's listening here is what I've said for like a few years now since we started
05:37this. We're in this for the long run. We're absolutely here to drive process improvement,
05:42competition and innovation. And you're going to see us continue to focus here.
05:47Now, looking ahead, what do you think the next phase of this evolution looks like for housing?
05:54Yeah, I think we're in this moment where, like I said before, the data and the scores and all these
06:01other elements get to prove itself out. We're in this moment where consumers have higher expectations
06:06of how we underwrite than we ever have before. And those things are converging all at the same time.
06:12I think we're in a moment where we're going to get to see this thing really evolve. And my personal
06:17hope, like my my goal in kind of doing this job is to open up homeownership to more people who
06:25maybe
06:25haven't had access to it before or were afraid that they wouldn't qualify. And if we can get to them,
06:31if we as an industry can open this up and bring more people into the process, then we're going to
06:36thrive.
06:37What a fantastic goal. It's fun. Michelle, thank you so much for sitting down with HousingWire and
06:43getting into modernization, better data and what consumers expect from lenders. Thank you. Thanks for having me.
