Mortgage lenders that originate conforming loans for condominiums must first identify and then contact and query associations to determine eligibility. This can be a time-consuming process that stretches out the underwriting process and adds to the cost of origination.
To solve this challenge, CoreLogic has introduced a new service that helps lenders and investors more quickly determine whether condominium projects are eligible for government-sponsored enterprise and investor lending.
CondoSafe, a Web-based data and analytics tool, draws on data provided by more than 140,000 condominium associations to determine whether a specific condominium project meets eligibility requirements, the company claims.
To facilitate consistency in the data collected, CoreLogic has developed the first standardized, copyrighted condominium association questionnaire, which it developed by working with leading lenders, U.S. housing agencies and condominium industry groups.
Lenders using the new service will have access to underwriter-friendly reports that they can use in making lending decisions and performing quality control reviews on condo transactions. These reports will include "alerts" based on all applicable agency condominium guidelines, thus helping lenders identify potential eligibility issues such as owner occupancy, commercial/residential mix or loan performance. They can also access requested association and insurance documents.
CoreLogic says the new service is designed to become an industry-wide utility.
‘The idea for CondoSafe came from our clients who were frustrated by the inefficiencies, redundancies and risks in the project approval process,’ says Arlene Hyde, senior vice president, client experience at CoreLogic, in a release. ‘Our standardized questionnaire will make it easier for associations to provide information and for underwriters and investors to review it.’
She adds that CoreLogic has already identified more than 75% of all associations, ‘beginning with those that have the highest level of lending activity.’ Information on less-active associations will be delivered on an on-demand basis, she says.
Initially, CondoSafe will provide alerts based on apparent conflicts with investor guidelines, CoreLogic says in its release. Future versions of the software will also compare association-provided data to historical statements and validate the data against other CoreLogic databases, such as loan performance and multiple listing service data, to alert clients to potential discrepancies.