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Taking Time, Errors and Angst Out of the Tax Information Process

October 26, 2021  //  BY First American Data & Analytics

“…In this world nothing is certain except Death and Taxes.” - Benjamin Franklin
While the quote might be a little gloomy, the prospect of procuring accurate property taxes at different points over the life of a loan can be a daunting, even dreaded, experience for a lender. This is particularly true for lenders, aggregators and servicers relying on less efficient analog and manual processes.

While the large servicers tend to outsource their tax information and payments, many mid and smaller servicers still procure this information in-house. In addition to servicing, there are other points in the loan process that require accurate, updated property tax information: the initial TRID disclosure, for example, the loan closing (though this is usually handled by the title agent) and correspondent and portfolio sales. A growing number of lenders are also finding that unpaid property taxes can be predictive of future mortgage default.
Securing property tax data at many lender shops can involve inefficient manual processes that add time and cost and can lead to data integrity issues. Think about it: there are more than 23,000 taxing authorities in the U.S. To obtain accurate information, staffers have to search websites or call the taxing entities. The information they receive often comes in a wide array of formats requiring a knowledgeable reviewer.

First American TaxSource® is an automated, real-time, nationwide solution for sourcing property tax information, including real time tax status. All a user has to do is request a report, and TaxSource does the rest. The solution can access property tax records nationwide to deliver current-year bill details, assessed values with exemptions, tax agency requirements and prior-year delinquency records with payoff amounts. TaxSource data can be provided in JSON format and mapped into a lender’s servicing systems via API.

TaxSource information is presented in a standard, easy-to-understand format so you don’t have to be a property tax expert to understand it. Lender-use cases include:

• HELOC origination (TaxSource is an inexpensive way to originate these no-cost products)
• Loan review due diligence
• Validating taxes for non-escrowed accounts, which can save lenders the cost of ordering an O&E Report
• Proactively monitoring non-escrowed loans for delinquencies
• Analyzing pools of loans for early indicators of risk

Because TaxSource validates the data, internal resources can focus on complicated situations, rather than reviewing and validating every report. A network of experienced regional property tax specialists is also available to support clients using the platform.

Check out our latest TaxSource webinar for a demo of everything it has to offer.

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