Will lenders new social credit modeling strategies be good or bad for those wholesaling houses?
Lenders of all types have been increasingly looking at social media data for credit making decisions. According to recent coverage of the developments by the Wall Street Journal some creditors and funds have already been using information from social media sites like Facebook to decide whether to make loans or invest or not. Consumer loan providers have also been looking at this information while home mortgage lenders and FICO modeling experts have been analyzing how it can be used to predict loan and borrower performance.
Like it or not it is already here. It is likely to continue to keep on growing in adoption too, even though it has raised some obvious concerns from consumer protection agencies and Feds over privacy and discrimination.
Using information from social media profiles for loan underwriting will certainly have wide reaching impacts on the real estate industry and ultimately be a factor which those wholesaling houses need to keep eye on.
This trend will directly affect wholesaling CEOs personally as they look for credit both business and personal, as well as for buying properties. It will also affect the market in terms of regular buyers and renters looking for housing, as well as touching a wholesaler' traditional end buyer and customer - buy and hold rental property investors.
So how does social credit modeling work? It is clearly still in early stages and will continue to evolve as metrics are compared with loan performance over time.
Some of the criteria lenders may currently be looking at include:
Number of contacts Length of account history Which social networks are being used Strength of contacts Ties to community Money troubles What borrowers are talking about What others are saying about loan applicants Creditworthiness of friends and business contacts Shopping habits Verification of job and income history Location of borrowers Tech devices being used Personal lifestyle choices which could present risks
What will really cause the headaches is the disparity in common sense and underwriting guidelines. What makes sense to consumers may not match up with computer automated underwriting systems at all.
Social monitoring could also make borrowing far more complex, with traditional loan criteria overlayed with ฝากขายทาวน์เฮ้าส์ conditions such as borrowers needing a certain minimum number of social contacts, having a specific number of years history, using more upscale mobile devices, and more. It could bring some pretty bizarre conditions for those that travel a lot, use prepaid services and enjoy their privacy.
The better connected those wholesaling houses are with loan officers and credit scoring firms the more advantage they will have as social is integrated.
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