Improved borrower experience, digitization, paperless mortgage. These may all be catchphrases if not for the reality that one can easily be buried under heaps of documents and layers of verification that is the mortgage application process. A single mortgage application can take some 70 days, something that a new technology wishes to cut to at least 10 days.
Experian-Finicity’s Digital Verification Solutions
Experian and Finicity recently launched a host of digital solutions for real-time verification of income and assets from more than 80% of financial accounts.
The Digital Verification Solutions are all for accelerating the loan underwriting process, “making paper-based processes more obsolete” per Experian and Finicity’s joint statement on March 20. The platform also promises improved accuracy and reduced fraud risk for lenders.
How it works?
- The Digital Verification Solutions platform allows a consumer to complete the assets and income verification in one sitting.
- The consumer will allow the delivery of such information for lender approval through a platform hosted by Experian.
- The lender will then able to integrate such information into its decision-making process.
- This way, the lender and related service providers can thus verify the consumer’s assets and income and assess his/her ability to repay the mortgage pursuant to the Fair Credit Reporting Act.
- The lender will be able to access real-time alternative data on the consumer’s income, assets and capacity to repay, giving them a more in-depth look into the consumer’s financial capacity.
With less hassle on their part, the digitized solutions hope to encourage more consumers to get a mortgage with more types to choose from.
Mortgage Processing Made Easier for Consumers, Lenders
It is projected that 25% of U.S. consumers with limited to no credit histories will benefit from these innovative services, including millennials. The platform will leverage on payment histories on rent, phone bills and bank accounts as proof of a consumer’s ability to repay the loan.
Experian President of Consumer Information Services Alex Lintner stated, “Our goal is to make the loan process far easier for consumers and to provide better information for lenders through easy-to-use, fair and transparent digital and mobile experiences.”
“Digitizing the credit decisioning process will improve the experience for lenders and borrowers while enabling further innovation in the lending space,” echoed Steve Smith, who serves as CEO of Finicity.
Speaking of improved borrower experience, Finicity is part of a pilot program to become an eligible vendor of asset verification for Fannie Mae’s Day 1 Certainty™.
Day 1 Certainty™ simplifies the process of applying for Fannie Mae mortgages for borrowers with fewer documents to gather and waiver of property appraisals on some refinance cases through DU® Validation. For lenders, it means relief from making representations and warranties relating to property appraisals through the Collateral Underwriter®.