Will Social Media Someday Play a Part in Mortgage Underwriting?

 

 

Social media has become a large factor in the business decisions companies make. Employers regularly check job applicants’ social media pages in addition to their Résumés. Financial institutions are monitoring their clients’ social media in order to learn more about them, their interests, and their spending practices with the goal of tailoring their marketing to their clients’ interests.

Is it far-fetched to assume lenders or credit bureaus
may start reviewing applicants’ social media as part of their credit underwriting?

 

The pervasiveness of a person’s social media can provide a window into a person’s character that a traditional credit report likely will not reflect. In his recent article in American Banker (Are LinkedIn Profiles A Better Credit Barometer than Loan Applications?, December 8, 2015), Andrew Waxman explains that access to social media accounts, along with algorithms able to interpret the data effectively, can potentially tell a creditor a great deal of information.

“First, access can help to identify potential red flags worthy of further investigation. Second, such access can help identify potentially profitable customers based on job profiles, social and demographic histories, and stability of networks and personal relationships.”

 

The social media sites of customers are already being reviewed by many financial services companies; mortgage lenders and credit bureaus may not be far behind in integrating social media metrics into their credit scoring processes. However, while the Pandora’s Box of consumers’ social media may already be open, I can only imagine the intense uproar from consumer advocates and government regulators if this ever comes to be.

 

Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.