It’s no secret that the mortgage process is broken.
Ask anyone in the industry, and they’ll nod in agreement; mention the phrase “stare and compare,” and people cringe with recognition. Start trying to explain the problem and consumers and lenders alike will finish your sentence with all the reasons things aren’t working.
But who’s at fault? Lenders want to make responsible lending decisions based on various documents and pieces of paper. They’ve set up rigorous workflows to catch errors in imperfect information. Consumers are just trying their hardest to comply with the dizzying array of requirements that stand between them and their dream of a home.
At its core, today’s lending technology lacks robust data infrastructure to serve the needs of tomorrow. To build a more secure 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. We need a new way forward.
The loan origination process was created decades before online banking – or even the internet – became widespread. In that time, the technology landscape has fundamentally shifted.
API-driven connectivity now makes it possible to access validated source data. With accessible data, lenders can freely redesign the lending process to be both more efficient and delightful for borrowers. People expect a lending experience on par with consumer giants like Apple and Netflix; data connectivity now makes it possible.
We’re not the first ones to leverage data accessibility in innovative ways; budgeting apps like Mint have been helping people better understand their finances by connecting 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.
What does Blend do differently?
Incrementally improving the current process won’t get us where we need to go; the future of better lending must be rebuilt around a data-powered experience.
Towards this end, we’re using verified 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 giving lenders the means to quickly understand a borrower’s financial situation. Lenders no longer have to rely on built-in redundancies to mitigate risk.
We’ve learned that building trust early with a guided user experience increases borrower engagement and connectivity to source data. Our platform already sees up to 62% of Blend users connecting to their financial accounts, giving lenders data-rich applications that streamline their decisioning process. These user activities shave days off funding times and translate to dollars saved for every loan application.
Sourcing the data is only one part of the battle. At Blend, we have a large dedicated team focused on using the data to drive a smarter process. Blend’s Mortgage Intelligence® helps lenders satisfy conditions with 50% fewer interactions. For the roughly 75% of applications that require advanced document and data requests based on manual document review, Blend’s automated follow-up workflow allows borrowers to satisfy these requests at the start – and not revisit the process later.
For example, our system not only flags large deposits where appropriate but also instantly presents the borrower with a simple workflow to get a signed letter of explanation within seconds. The same is true for other data from the application such as gift letters and income types. Data connectivity allows us to request a large number of operational items – normally occurring later in the process – much earlier, in a simple way for the consumer. Our platform is designed to reduce tasks like reviewing documents so lenders can focus more on their customers. This form of intelligence enables lenders to prioritize meaningful conversations that add the most value to the customer relationship.
On top of that, Blend’s platform leverages insights into consumer behavior to improve efficiency for every application. It sees what activities happen manually and detects patterns. That means if you always request a specific document from borrowers who are applying under a particular program, it will automatically suggest that your team send that request to that type of customer.
In the end, the benefit of this data-first approach is clear: using a combination of rules and machine learning can drive a faster, smarter process. We’re cutting over 50% of the total touches needed to close a loan, not because we have a better system to do things the old way, but because our system analyzes information to do things in a new way.
Working together to reimagine what’s possible
Blend is forging the future of lending with innovative lenders and ecosystem partners by leveraging increased access to data and capturing a borrower’s complete financial profile. This approach continues to unlock opportunities for machine learning and artificial intelligence to make step changes in the lending process and remove the frictions that bog down both lenders and borrowers. Our goal is to bring efficiency and higher customer satisfaction not just to home loans, but eventually to all consumer lending products.