Sperlonga, a data aggregation business for non-standard credit data sources, announced it will start reporting homeowner and condominium association (HOA) payment and account status data to Equifax in an effort to help create a better picture of borrowers’ score.
As a result of the news, Sperlonga will report HOA assessment payment data for associations that sign up every month regardless of the payment frequency of the assessment.
Sperlonga noted that the HOA trade line will appear on consumer credit reports in relatively the same format as other credit and debt obligations that appear on consumer credit reports.
Right now, credit reports used in mortgage lending only indicate the outstanding balance and if a borrower has been on time or delinquent on existing credit accounts such as credit cards, mortgages or student loans.
Since the credit box is way too tight, the industry is looking toward alternative credit reporting methods to help create a better picture of borrowers’ score.
“The vast majority of property owners who live in an association have been paying their assessment payments on time for many years and now our service will begin to help reward them with positive monthly reporting to their credit profile with Equifax,” said Matt Martin, chairman and founder of Sperlonga. “Historically, for those residents who had made their assessment payments on time, this positive payment behavior was not reflected on their credit reports,” he continued.
The reported added that the potential reach of this change is huge. According to a 2014 study conducted by the Community Association Institute, there are over 338,000 associations in the U.S. with more than 27 million residents.
“Our assessment payment reporting service has created the opportunity for Sperlonga to deliver a positive impact to HOAs and its residents” said Dan Berman, CEO of Sperlonga.
The news falls in line with the recent launch if Fannie Mae’s Desktop Underwriter Version 10.0, implementing the long-awaited use of trended credit, a change that could open up the credit box to potential borrowers previously unable to get a mortgage due to their credit history.
Trended credit data, according to Fannie Mae, allows a smarter, more thorough analysis of the borrower’s credit history and helps creditworthy borrowers obtain access to mortgage credit and sustainable homeownership.