FNC Helps Lenders Identify Loans Affected by Disaster
In times of widespread destruction, such as the California wildfires and 2005's Hurricane Katrina, property values can plummet quickly. Specific information regarding the property backing a home loan becomes crucial to mortgage lenders. This is why many major mortgage lenders are seeking technology to pinpoint customers who may have been impacted and identify properties after a natural disaster.
As a means of helping lenders mitigate risk, FNC Inc., an Oxford, Miss.-based provider of real estate collateral information technology, offers multiple systems to quickly identify properties potentially impacted by natural disasters.
"Any time there is a disaster, our clients can use their Collateral Management System and the data we provide to identify their properties that might have been affected," said Jon Fisher, director, Client Services Group, for FNC.
FNC and its systems bundle loan information and give the data to the lenders in a format that simplifies the process of identifying potentially impacted properties. Having the loan number of a damaged or destroyed property, the property address and current status of the loan, either open or closed, helps lenders quickly determine a course of action.
"It gives them a snapshot of their loan portfolio by zip code, so they can quickly identify their properties that might have been affected and understand the true values of those properties post-disaster," Mr. Fisher added. "This is just a bit of extra customer service we provide to our clients who can use our technology basically as risk mitigation."
Such information is important to mortgage professionals in both loan servicing and origination. Loan servicing professionals can use the data as a starting point to identify potential loan defaults. If, for instance, the properties were destroyed, subsequent loan payments may depend on homeowners' insurance settlements.
Originators can use the technology to quickly identify open loans on damaged properties and avoid over-lending. Those properties may need post-disaster due diligence, such as an updated appraisal, to make sure the property's value has not declined.
FNC offers the situation faced by George Pence, vice president for residential appraisal services at Union Bank of California, as a prime example of how its technology can help. "Because of the recent wildfires in southern California, the lending units asked us to have our appraisers re-inspect properties on which loans are about to fund," said Mr. Pence. "This [service] was a big help to us."
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