Unlocking Doors: The Promise and Peril of Using Alternative Data in Mortgage Underwriting

The use of utility, telecommunications, and rental (UTR) payment history in mortgage underwriting has attracted recent policy attention as a solution to the nation’s persistent homeownership and wealth gaps. Such data show how a diverse range of people meet household expenses each month, and they may point to how well people might perform with an affordable mortgage. To date, most credit bureau information comes from repaying loans and credit cards, and it is essentially blind to many households of color, consumers with low incomes, young adults, recent immigrants, and other adults who for myriad reasons have no or “thin” credit files. Up to 20 percent of US adults cannot be scored under widely used credit scoring models. Numerous actors across the housing finance system are rewiring their processes to better account for UTR data in mortgage credit underwriting.

The Urban Institute and FinRegLab invite you to an event examining the current state of play and the policy landscape for the use of UTR data. The event will explore recent innovations and pilots to further such financial inclusion and the challenges of significant systems change. In addition to presenting findings from a national landscape scan of UTR data policy and practice, the event will feature leaders from the field to discuss data access and quality and how to build more robust credit scoring models.