MReport August 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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34 | M R EP O RT FEATURE technology with AIM's 10-day PCV solution will help minimize risk and streamline the mortgage lending process for both lend- ers and borrowers," said Kevin Kauffman, Freddie Mac Single- Family VP of Client and Partner Delivery. "Open banking data is improving the lending process by providing financial data from consenting consumers' bank accounts to verify assets, income and employment." The Transformational Impact of Open Banking T he mortgage process is still largely burdened by manual processes that leave consumers submitting (and often resubmit- ting) a large amount of paper documentation or scanning and emailing PDFs. This cumbersome process is frustrating for both lenders and consumers who are, increasingly, embracing digital ex- periences over manual processes. Mastercard's data showed nearly three out of four respon- dents (72%) were surprised that manual processes still drive so much of the mortgage process. In an environment where consumers are accustomed to everyday digi- tal experiences where speed and accessibility matter, open banking is changing mortgage lending and how the industry thinks about the customer experience. The availability of real-time data through open banking and the acceptance of this data by Freddie Mac is allowing lenders to adjust underwriting models to not only be more efficient and scalable, but also potentially more inclusive since they have a more compre- hensive picture of the borrower's financial situation, thereby enabling more consumers to realize the dream of homeownership. A Digital-First Mindset C onsumers are increasingly relying on financial technolo- gy to gain insights and streamline their experiences. What's more, consumers understand the poten- tial of their own financial data and are comfortable with using it. Only 12% of respondents to the Mastercard survey indicated that they were not comfortable sharing their financial data with a lender. This access to data can give lenders a faster, more accurate, and more efficient underwriting process. Consumer-permissioned data is providing an addition- al view that can lead to better decisioning for lenders and better financial outcomes for consumers. Additionally, consumers whose lenders leverage digital verification processes are more satisfied with their overall borrowing process. Borrowers whose lenders used digital mortgage verifications were less likely to say the loan process was the most stressful part of buying or refinancing a home, and 83% of respondents using digital verifications said their loan processing time was shorter than expected or met their expectations. These new tools and systems can help reduce the manual verifications and documentation that can add to the frustration of borrowers. A recent study by Freddie Mac found that the lenders who are leveraging digital technology effectively and inte- grating digital enhancements with changes to process management and culture are generally those in the top-performing category. Additionally, across all lender categories, mortgages with digital offerings produced, on average, nine to 10 days of savings in closing cycle time. Using open banking data with AIM helps to meet the needs of today's digital consumer—provid- ing a streamlined process with less friction and paper-chasing versus manual processes. Automating Mortgage Lending T he benefits of automating the mortgage lending process are significant for lenders through reducing the frustration of docu- ment collection, removing manual errors, lowering the risk of fraud, increasing referrals, and opening new doors for account and em- ployment verifications. Consumers benefit from auto- mation that fits their lifestyle and expectations when it provides transparency in the ability to per- mission their financial accounts for their benefit. Using open banking also gives the consumer more choices, allowing them to select the solution that best meets their needs. Mortgage Verification Services (MVS) from Finicity, a Mastercard company, is a one-touch digital verification product that provides the financial data necessary for AIM to assess assets, income and employment seamlessly. Each lender's workflow can be unique. MVS is designed to be flexible and accommodate everything from refinancing to new pur- chases, including qualified and nonqualified mortgages. The fea- tures are built with both lenders and borrowers in mind to create a reliable and agile solution—en- hancing the overall experience. Leveraging open banking in mortgage lending is a win-win for lenders and borrowers. ANDY SHEEHAN, EVP, leads Mastercard's Finicity Open Banking in the United States. Sheehan is driven to build and inspire innovative teams to deliver exceptional customer experiences. For more than 30 years, he has focused on harnessing data, analytics, and technology to strengthen businesses and consumers alike across various industries. Prior to joining the Finicity team in 2019, Andy spent nearly two decades at Experian. While at Experian, he successfully positioned the business for growth during the volatile post-recession period, developed Experian's international assets and piloted strategic planning and corporate development initiatives. "The mortgage process is still largely burdened by manual processes that leave consumers submitting (and often resubmitting) a large amount of paper documentation or scanning and emailing PDFs."

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