First American Enhanced Credit Reporting Service Helps Increase Loan Eligibility for First-Time Home Buyers
September 23, 2004
SANTA ANA, Calif. /PRNewswire-FirstCall/ -- The First American Corporation (NYSE: FAF) announced the availability of an enhanced set of credit reporting services specifically designed to benefit low-to-moderate income and first-time homebuyers -- particularly in the traditionally under-served Latino, African-American and Asian/Pacific Islander communities. These services help mortgage lenders evaluate and approve home seekers who require updates or who have little or no traditional credit history, creating new homeownership opportunity while maximizing business opportunities within this growing market segment.
As a part of First American's continuing commitment to remove barriers to homeownership for minority and low-to-moderate income families, enhanced credit reporting services help reduce approval obstacles for consumers who might be unnecessarily subjected to higher-than-market interest rates or considered ineligible. Major lenders often lack the resources to perform the additional work required to serve these consumers and manage the associated risk. By providing standardized tools that satisfy or exceed industry and secondary market requirements for updates and nontraditional credit applicants, First American helps lenders reduce time and expense while reaching their community development and affordable housing goals.
"We've truly created a win-win situation for both the consumer and the lender," said Mark F. Catone, a senior vice president with First American's Credit Information Segment. "We work directly with consumers on the lender's behalf to handle creditor verifications, credit bureau data discrepancies, credit scoring, nontraditional credit reporting and consumer call-center services, all as one integrated service. Our new services fill a need that the industry has typically avoided because of complexity, and are critical to helping bridge the homeownership gap."
"A lack of traditional credit is one of the largest barriers to Hispanic homeownership," said Gary Acosta, chief executive officer of SDF Mortgage and chairman of the National Association of Hispanic Real Estate Professionals (NAHREP). "By offering a resource of new credit data that can be acquired in a timely and cost-effective manner, First American has provided the mortgage lending community with the potential to reach and serve a much larger number of Hispanic and other under-served homebuyers."
First American's enhanced credit reporting solutions -- now available to credit grantors through First American CREDCO -- include:
"No other company in the nation has the extensive data resources and expertise necessary to provide these services in the manner that First American does," said Parker S. Kennedy, chairman and chief executive officer of The First American Corporation. "We have the responsibility to help drive homeownership in under-served communities and a full appreciation of the resulting business potential. Working together with our industry partners and customers, we will do our part to make homeownership more than just a dream for an increasing number of Americans."
A thorough examination and validation of all credit information available on a consumer with minimal credit history. Verification Services can be employed to further investigate and update items such as current balances on accounts older than 90 days, accounts in dispute, accounts with a severe delinquency, public records and employment.
A service that allows lenders to refer consumers to First American's Fair Credit Reporting Act (FCRA)-certified specialists, who work with the consumer to explain credit issues and can recommend strategies for establishing and improving credit history.
Consumer Dispute Services
First American's specialists work hand-in-hand with the consumer to resolve any discrepancies contained within their credit file. Consumers are given a single contact point throughout the dispute process, alleviating the need to work with each bureau individually to update their files.
Updating creditor information at the bureau level can potentially have a positive and immediate impact on a borrower's credit score. Once verified and updates have been completed, the borrower's credit report is immediately reissued with a revised score.
First American's nontraditional credit report utilizes any available bureau data as a baseline and supplements it with alternative credit sources such as rent payments, utility or insurance bills. Supplemental credit information is then verified by First American's FCRA- certified specialists, resulting in a credit report that meets or exceeds industry and secondary market underwriting requirements.
"The uniqueness of this credit services suite is that it blends disparate data sources, most of them nontraditional, with the processing strengths of First American," said Anand K. Nallathambi, president of First American's Credit Information Segment. "In the recent past, there have been attempts to bring new data products to the emerging markets underwriting process. However, nontraditional data products, even those that produce a credit score, are incomplete without the added service of working with consumers to create their credit profiles and thus present the lender with a comprehensive credit analysis. The key factor in this new service is First American's ability to take nontraditional data and combine it with an individualized consumer service that lenders can easily apply to their underwriting processes."
The enhanced credit reporting suite is part of First American's broader minority homeownership initiative, launched in October 2003 to promote home buying among African Americans, Asian Americans and Latinos. The initiative includes philanthropic giving and investment programs, the development of alternative credit-screening products and discounted settlement services bundles, and an increased commitment to workforce and vendor diversity at First American. The five-year, multimillion dollar program, which is endorsed by The Greenlining Institute -- a multiethnic coalition that promotes homeownership and inner-city economic development -- was received positively at its introduction by representatives from Fannie Mae, NAHREP, the National Association of Real Estate Brokers and the Asian Real Estate Association of America.
Source: The First American Corporation