CoreLogic, a provider of information, analytics and business services, has released IncomeAdvisor, the only income assessment tool for mortgage and auto lenders, consumer loan providers and card issuers that delivers both a fraud score and actionable alerts, as well as an income estimation with measurable confidence levels. IncomeAdvisor is based on statistically sound, predictive analytics and patented pattern recognition technology that enables lenders to minimize risk and expediently extend credit.
"IncomeAdvisor comes at a crucial time when having a reasonable and real-time estimation of borrowers' income is vital to profitable decision-making," said Tim Grace, senior vice president of product management and analytics at CoreLogic. "With CoreLogic's unique data, patented fraud-scoring technology, and real-time availability, lenders, issuers and auto dealers will now have the ability to quickly assess income and fraud risk and extend their market reach to borrowers with less credit history."
"Confidence in a borrower's income has become increasingly important across all industries including approving loans for auto dealerships or underwriting loan modifications and short sale transactions," said Craig Focardi, senior research director at The TowerGroup. "Credit reports and verification of income solutions are costly, use data up to 16 months old, and only look at one aspect of a borrower's profile—whether they have repaid past debt. It's important for lenders and creditors to more quickly and cost effectively justify that a borrower has the income with the ability to pay."
Application information is run through patented pattern recognition technology and a report is instantly generated for each borrower. Statistical models and income percentiles for borrower information are derived from the vast CoreLogic consortium database consisting of more than 80 million loan applications. Each report clearly displays:
►An overall income risk assessment of "high," "medium" or "low" that is based on model fraud risk evaluation.
►An empirically-derived income fraud score of 1-999 which predicts the likelihood that the income provided by the applicant is false.
►Statistical model-based alerts which indicate the areas to further investigate.
►A model-generated estimated monthly income amount for the borrower based on common application data fields.
►Two additional income estimates for the borrower based on client configurable options to provide assurance of claimed income: Decrease model estimate by X percent to increase confidence the borrower makes "at least this much", and increase model estimate by X percent to improve confidence the borrower makes "no more than this much." This is especially useful in loan modifications and short sales where applicants tend to under-claim their income.
CoreLogic conducted extensive testing and analysis of federal fair lending and other consumer protection laws in the development of IncomeAdvisor. The introduction of IncomeAdvisor helps lenders and card issuers comply with recent federal mandates requiring lenders to validate borrowers' ability to pay based on verifiable income and asset information. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 and the Dodd-Frank Wall Street Reform and Consumer Protection Act impose this requirement on card issuers and mortgage loan originators, respectively. IncomeAdvisor is also able to provide an accurate income assessment to borrowers with thin or no credit file, enhancing the ability to lend to an expanded segment of the population.
When combined with CoreLogic LoanSafe Fraud Manager and CoreLogic 4506-T Income Verification services, lenders benefit from the full breadth of CoreLogic fraud and verification solutions.
For more information, visit www.corelogic.com.