ATLANTA—The NeighborWorks Mortgage Source product and pricing engine was created to give consumers and credit counselors a level playing field with lenders in terms of information, the head of the technology firm behind the system declared.
“It is an agnostic approach to lending,” continued Tammy Butler, president and chief executive of Direct Lending Family, West Dundee, Ill., during an interview at the Mortgage Bankers Association’s annual convention here.
The system does not discriminate when presenting products; the decision is based on the borrower’s financial data and not the profits the loan could generate, she explained.
Butler started working on the system five years ago because of what she saw as a “bad trend,” the increasing importance of subprime lending.
Whether it was intentional or unintentional, predatory lending practices were growing and to combat that, she was looking to bring product knowledge down to the consumer’s level.
So the product is being taken out to loan counseling outfits. It answers the question, Butler continued, “how does my client know they are getting the best fit for them?”
There is a separate module for loan officers, she said.
Mortgage Source has been designed to take into account the possibility the consumer has multiple sources for where they get the cash to close the loan.
The engine has the ability to underwrite across all platforms simultaneously in order to return the best product option for the consumer, Butler explained.
In a statement, Marietta Rodriguez, national director of homeownership and lending at NeighborWorks America, said, “This is a fantastic development for nonprofit mortgage lending. By enabling NeighborWorks organizations to access the most diverse mortgage choices available around the country, we are able to help more homebuyers get the right mortgage for the long term, at the best cost possible.”
The engine has been piloted with Direct Lending Family and NeighborWorks America for the past couple of years, Butler added.
Consumers who seek loans through NeighborWorks Mortgage Source will be going through homeownership counseling as part of this project.
Douglas Robinson, a spokesman for NeighborWorks America, said it has been proven with data that homebuyer education creates a better borrower because the consumer knows what to do, including such things as having property maintenance as part of their budget.
Consumers are prepared the right way for homeownership and this is one more tool for that, he said.
The scope of this system, Robinson said, gives more access to more loan products for these consumers.
Butler said the system treats all products equally, no matter who the lender is. For lenders, performance can be tracked and more products can be created to meet the needs of the affordable housing market.
