The tax estimating process is critical to several stages of the mortgage cycle: disclosures, underwriting and servicing. Accurate tax estimates benefit not only originators, but borrowers as well. Ensuring precise tax estimates throughout the loan origination process helps create the right blend of quality, performance and efficiency required for optimizing the borrower experience.
To better understand the effect of tax estimating on origination and closing processes, CoreLogic conducted a controlled random experiment simulating the estimation process. Based on the results of the experiment, CoreLogic concluded the following:
- Well-trained researchers required at least 20 minutes, but less than 45 minutes, for existing property loans.
- New construction loans required additional estimate calculation time.
- The process is completed three times in the loan origination stage: first in the loan estimate, second in the underwriting phase, and finally at loan settlement.
Although the steps above follow a validated process, the risk of quality variations may still exist in the absence of standardized information sources.
CoreLogic understands the challenge of providing quality property tax estimates during origination. As one of the largest providers of property tax services in the United States, the company has access to most current and historical tax information for the entire country, and for an estimated 22,000 taxing agencies.
In addition, CoreLogic manages one of the largest real estate databases used to procure, store and pay property tax amounts as well as to maintain payment status. Combined with its ability and infrastructure, its domain expertise provides the foundation for delivering new products designed to quickly and consistently generate high-quality property tax estimates throughout all stages of loan origination.
CoreLogic developed Property Tax Estimator to help estimate property tax data amounts in order to streamline the application process and improve the customer experience. By delivering the right tax data early in the process, Property Tax Estimator helps individuals estimate a borrower’s ability to financially support mortgage costs, and improves the process for servicers.
It also helps eliminate the need for any specialized skills required for data procurement and provides a consistent workflow process regardless of property, exemption status, county exception complexity and loan officer tenure.
Property Tax Estimator brings the full value of CoreLogic data capabilities in an Electronic Data Interchange solution with an option to integrate with the lender’s system. By facilitating the delivery of accurate property tax data before closing, CoreLogic helps ensure standardized tax data is used throughout the origination process. This improvement can help increase the quality of the closing and servicing experience.
Property Tax Estimator is particularly effective in estimating taxes for new construction loans and in areas of the country that have caps on annual increases for existing homeowners, and where the taxes can increase dramatically after a sale or transfer of ownership. Additionally, the solution helps streamline the total tax amount process time to approximately two to three minutes and eliminates the need for any specialized skills required for data procurement, as well as quality and time variation across property complexity and loan officer tenure.