Revolutionizing Mortgage Underwriting With Trended Early Access Soft Check

If homebuyers thought purchasing a home in 2024 would be easier than it was in 2023, chances are they’re now singing a different tune. While there’s continued talk of rate cuts later in the year, interest rates today remain high and have kept inventory low as existing homeowners choose to stay put in homes they bought with lower rates. Furthermore, the lack of new listings has buyers competing for far fewer available properties — while lenders attempt to drive business within a limited buyer pool.

When the market is this tight, being equipped with information as early in the process as possible is critical. For buyers, this means understanding how much they can borrow, and at what terms, before they start seriously looking for a home. For lenders, it’s about determining consumer creditworthiness early on to ensure the right decisions and investments are being made.

Preapprovals are a-changing

It’s a classic tale: Consumer requests preapproval, lender pulls a tri-merge credit report, consumer’s credit score is impacted, and loan offers come flooding in from competitors — all before a serious home search can even begin. Some lenders might even hold off on the tri-merge pull to avoid losing customers to trigger offers, and put closing at risk by moving forward without the usual consumer credit insights. Soft-pull prequalification solutions, which give lenders the option to prequalify applicants without a hard credit pull, solve part of the problem — but don’t offer the full scope of information needed to make a loan decision.

In response to new changes to programs from government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac — in which consumer eligibility for a Fannie or Freddie loan can now be determined based on information from a soft credit pull — TransUnion has substantially evolved its mortgage soft inquiry solution into a new product, TruVision^TM Trended Early Access Soft Check. With these GSE programs, lenders can:

• Begin the underwriting process based on soft inquiry credit reports and scores
• Choose to pull credit information from one, two or all three credit bureaus

These broadened offerings enable lenders to better protect their pipelines, while providing more certainty to consumers before credit scores are impacted.

And starting the underwriting process with TruVision Trended Early Access Soft Check isn’t just applicable for GSE loans (qualified mortgages). Other mortgages — from jumbo loans, portfolio loans and non-qualified mortgages — are also eligible, allowing all lenders to improve the customer experience while enjoying increased flexibility surrounding when, and how, they begin underwriting.  

More control over underwriting offers key benefits

The flexibility to pull from one, two, or all three credit bureaus gives mortgage lenders the choice to prioritize between cost savings and gaining a full view of consumer creditworthiness up front (the GSEs still require a full tri-merge credit report to close a loan). Perhaps more importantly, lenders can also have more control over how and when they finalize underwriting. This is beneficial in more ways than one:

• The risk of losing hard-fought for customers to competitors via trigger offers is significantly reduced
• Waiting until applicant and lender are confident in closing the loan to pull the tri-merge credit report or other hard inquiry report is far more cost-effective
• Access to rates and terms up front builds confidence that unwanted surprises won’t disrupt the chances of closing

Plus, lenders are enabled to provide a better customer experience for consumers brought into the underwriting process via soft inquiry — since they can shop for homes they know they can afford, have confidence their loans will be secured, and avoid being inundated with offers from competitors’ trigger programs.

TruVision Trended Early Access Soft Check

With TruVision Trended Early Access Soft Check, lenders can:

• Benefit from the ease and flexibility of a soft inquiry report that can also be used for initial underwriting
• Begin underwriting the loan much earlier in the process using the full credit file pulled from a single -, bi- or tri-bureau soft inquiry — alongside verification of income and employment (VOIE) data
• Choose from two permissible purposes — consumer consent or in connection with the extension of credit — and align TransUnion’s offering with the user experience (i.e. gaining consent from joint applicants)
• Leverage a more robust consumer view with up to 30 months of TransUnion trended credit and payment data
• Reduce upfront origination costs by starting the underwriting process earlier, adding in data from other bureaus when consumer and lender are ready

As the mortgage industry continues to evolve, lenders should be equipped to take advantage of the opportunities these changes afford — from protecting their pipelines by kicking off underwriting with soft credit pulls to reducing costs by meeting the tri-merge credit or other hard inquiry requirement later in the process. To learn more about TruVision Trended Early Access Soft Check, reach out to your TransUnion representative.