Your Pizza Purchase Could Disqualify You for a Loan
As a result of the mortgage meltdown, lenders are now hyper-cautious about who gets their money. A recent L.A. Times article, “Lenders’ Data Mining Goes Deep,” explains how banks use “data mining,” i.e., delving into seemingly insignificant information, available online, about their borrowers to make or change lending decisions.
An example that seems amusing, but isn’t, is tracking where a borrower, who ordered pizza online, had it delivered. A delivery address that differs from where a refinancing customer said he lives could be a strong clue that it was not an owner-occupied loan. Considering that the interest rate is higher for non-owner-occupied mortgages, this might be important information for the lending institution.
Some borrowers, of course, may understand this new paradigm and order by phone or in person, but others might get caught in “fudging” their application.