As you are likely aware, approving a loan is just the first step in managing a borrowing relationship. Once that loan is approved, the mortgage due diligence does not stop — in fact, it may even be more necessary.
We have recently written about just how quickly a client’s financial situation can change. This is especially relevant during the COVID-19 pandemic and the economic fallout. A borrower that has a spotless record could run into unforeseen problems.
However, as a lender, it is in your best interest to try to foresee as much of these problems as possible — both for your client and for your own portfolio health.
Technology can help you monitor a loan investment and flag potential issues with your clients’ financials.
Here are a few of our top tips for monitoring portfolio health:
Tip #1: Track Day-Forward Title Registration Activity
Day-forward title registration activity is a key metric for monitoring ongoing portfolio health. Through the Property Identification Number (PIN), you can be notified of significant changes to property titles in which you have an interest.
You can proactively watch for second charges registered on title, discharges, tax liens, and more that could indicate a potential change in priority.
If needed, you can look at ways to mitigate the risk, such as repricing or even recalling the loan. The earlier this information is captured, the more options you (and your clients) have.
Not only can this help keep your portfolio healthy, but it can also provide insights that can lead to upsell opportunities or identify leads for unique mortgage products.
Tip #2: Monitor Risk Indicators
In order to monitor ongoing risk, you need to watch for potential red flags.
This includes key instruments, such as CRA liens, judgments, power of sales, and more.
These indicators could reveal an issue with your client’s financial health (particularly during a tumultuous time, such as COVID-19). If you catch this early, you can check in with your client and pre-empt any chance of loan loss.
This can also indicate potential fraud flags. As we have reported, COVID-19 could be leading to increased identity theft and real estate fraud. By monitoring risk indicators, you could follow up on changes to ensure that it really is your client who is requesting them.
Tip #3: Assess the Data Source
When monitoring your portfolio, you want to ensure that the data your technology is using is accurate, complete, timely, and provides wide coverage.
If your data is unreliable, the security of your portfolio and your risk management processes could be jeopardized.
At Teranet, for instance, our insights are based on the highest quality, most comprehensive data set in Canada. We maintain a focus on accuracy, completeness, coverage, and timeliness to ensure land information that you can rely on.
One of our solutions for monitoring portfolio health is PIN Monitoring, which enables customers to receive notifications for registration activity on properties in their securitized portfolio.
The other key to selecting your data source is looking at what else that data source can tell you. For example, if you choose Purview’s PIN Monitoring solution, you can also access other Purview property reports — including land title reports (also known as Parcel Registers*) that can reveal further information about registrations, discharges, judgements, and beyond.
These tools can help you make the most informed decisions about your portfolio while ensuring enhanced due diligence.
In today’s times of uncertainty, lenders need access to real-time information to see changes and evaluate ongoing risk.
Purview provides solutions that do just that. Our tools optimize portfolio analysis, verify legal information, estimate property value, and give you the power of more.
Get started with PIN Monitoring or one of our other solutions today. Call 1-855-787-8439 or visit www.purview.ca.
