Low- and High-Risk Whole Loan Selection: Getting a Clear Picture

Profiling whole loan pools is an essential process for today’s lenders. With risks on the rise, regulations becoming harder to manage and a still-shaky economy, lenders must make wise credit-lending decisions.

Lenders need up-to-date, regularly monitored credit data in order to differentiate between low-risk and high-risk whole loan pools. Many lenders face tightening lending requirements but lack the ability to see clearly into their borrowers’ true creditworthiness over the long term.

Why it matters

Up-to-date borrower performance is an essential component in ensuring profitability with credit decisions. However, understanding borrower health should not stop after the loan-origination phase and prescreening. To confirm a borrower’s ability to make and maintain credit obligations, it must occur over the long term.

Accurately profiling a borrower’s performance in the most recent months is one of the best ways for lenders to fully understand all the borrower’s credit obligations. Such information also helps reduce the risk of overbidding and underbidding, and gives better insight into a borrower’s financial position.

When it comes to profiling potential investments, it’s necessary to identify those candidates that are low risk and those that are high risk within whole loan pools. Yet most lenders do not have access to the necessary information to make this happen.

Get the information

To gather this information and maintain its accuracy in both the short and long term, lenders can utilize Equifax Whole Loan Solutions. Lenders receive ample and up-to-date information, as well as these benefits:

  • Improved risk assessment across all ranges of borrowers
  • Risk monitoring through property valuation solutions
  • Understanding a borrower’s financial health trends (rather than just utilizing static information)
  • Increased efficiency within the lending process
  • Improved and enhanced decision making to determine which loans to maintain and which to unload
  • Regular validation of key information, including employment and income
  • Access to reliable property valuations

With Equifax Whole Loan Solutions, information becomes readily available, allowing for accurate profiles of potential investors. Investors can better differentiate between low- and high-risk whole loan pools and ABS deals and, ultimately, reduce risk while increasing profitability.

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