MReport July 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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30 | TH E M R EP O RT FEATURE access to account and application status have plagued consumers. Advancements in technology are helping to change this, trans - forming traditionally confusing, paper-heavy processes into more intuitive and digitally accessible ones, all while maintaining robust compliance. By streamlining the collection and verification of data, including bank account and credit informa - tion, tax forms, pay stubs, and other required figures for the obligatory 1003 form, technology has provided unforeseen benefits and increased loan officers' band - width to work with higher-touch borrowers who need to provide more documentation. Rather than relying solely on paper docu - mentation or desktop software, a handful of fintechs are power- ing a mobile-first experience for borrowers that provides them with unparalleled ease of use. This is especially monumental for underserved communities, includ - ing low-income and under-banked individuals, who are typically heavier users of mobile accord- ing to the Board of Governors of the Federal Reserve "Consumers and Mobile Financial Services" report. Often these groups favor a phone as their primary computing device over an expensive laptop and monthly internet bills. This increased efficiency can lead to lower costs-to-serve, which can ultimately be passed along to the borrower in the form of lower rates. Empowering the underserved: The Census Bureau reports that one in 10 people within the U.S. population has a disability, making them a large percentage of the underserved population. Many basic financial services, including traditional and alternative bank - ing, online payment services, and mobile banking are inaccessible to this group. With the advent of accessible technology, including magnifiers, dictation support, hear - ing aids, and more, people with disabilities are gaining access to the financial services they deserve. Private financial service websites that do not ensure access for people with disabilities not only do a disservice to growing segment of their potential and current customer base but also open themselves up to litigation risk. But rather than wait to be compelled by litigation or regulators, forward- thinking financial institutions are proactively making changes to increase accessibility by working with ADA-compliant solutions, including ours. On top of being the right thing to do, becoming more accessible offers opportunities for business growth and increased profitability. Why Now? T he loan origination process was created decades before online banking—and even the internet—became widespread. In that time, the technology land - scape has fundamentally shifted. Application program interface (API)-driven connectivity now makes it possible to access vali- dated source data. With accessible data, lenders can freely redesign the lending process to be both more efficient and more delight- ful for borrowers. People expect a lending experience on par with those of consumer giants like Apple and Netflix; data connec- tivity now makes it possible. Budgeting apps like Mint have been helping people better understand their finances by con- necting directly to their assets and accounts for a decade. Even the U.S. government is on GitHub, leveraging APIs to connect data sources to tackle issues like voter registration. Incrementally improving the current process won't create a more accessible ecosystem. Lenders must rebuild the origina - tion process around a data-pow- ered experience. Today's lenders can team with companies to source data to build a consumer's complete financial profile. It's hard to understate the impact of removing uncertainty from the loan process by giv - ing lenders the means to quickly understand a borrower's financial situation. Lenders no longer have to rely on built-in redundancies to mitigate risk. Smart tech platforms can leverage insights into consumer behavior to improve efficiency for every application, such as seeing what activities happen manually and detects patterns. The benefit of this data-first approach is clear: Using a combination of rules and machine learning can drive a faster, smarter process. Forging a more accessible future with innovative lenders and ecosystem partners by leverag - ing increased access to data and capturing a borrower's complete financial profile unlocks oppor- tunities to make changes in the lending process. Editor's note: Affirm's founder and CEO Max Levchin is an investor in Blend. ERIN COLLARD is CFO and Co-founder at Blend, has over a decade of deep financial and technology experience, and is a veteran angel investor. The mortgage process is broken. Ask anyone in the industry, and they'll nod in agreement. … Today's lending technology lacks robust data infrastructure to serve the needs of tomorrow. To build a more accessible system that uses verified source data and complete financial profiles, we need to rebuild and rethink. Without reimagining the process as a whole, we won't get to where we need to go.

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