Automating loan verification | Blend

Automating loan verification for greater productivity and shorter loan cycles

Explore how technology can help find efficiencies during a time-intensive — but fundamentally important — step of the lending process.

The traditional loan verification process can be sluggish, with frequent disruptions and delays caused by bottlenecks. Before lending teams can even begin verifying assets, income, or employment, they have to wait for consumers to complete the lengthy — and frustrating — process of logging into their accounts to collect tax returns, bank statements, and other information. When financial institutions aren’t using a digital solution, this entire data collection and entry process happens manually.

Fortunately, automated loan verification can help speed things up — for both lending teams and borrowers. But how can such solutions account for future changes in industry standards, while making the process more efficient for lending teams?

Advantages of using a cloud banking platform for loan verification

Partnering with Blend means your organization stays aligned with the best practices and the leading processes in the industry.

While standards and verification requirements may change in the future, Blend stays ahead of the curve. Our industry experts work closely with our technology partners to ensure our customers have the technology they need to meet today’s demands.

To make sure our customers are staying up to date, we prioritize certain features like data connectivity. With data connectivity included in our digital application, verification is led by the borrower. They’re able to connect to their asset, payroll, and tax accounts, on their own time, through a simple and trustworthy experience.

This convenience also helps lenders. Our digital applications are optimized for conversion, in order to minimize customer friction and drop-off. Income and employment are verified at the time of application completion, and our platform supports third party identity verification data sources and checks through a single integration point. Up to 77% of consumers choose to connect directly to their accounts during their initial application.

How intelligent automation improves the loan verification process

When borrowers connect to their asset, payroll, and tax accounts, Blend’s automation helps identify potential red flags, which reduces manual downstream work for lenders. For instance, if a borrower has an unusually large deposit, Blend’s automation will prompt the borrower with questions for further explanation in order to help the lender gather the required information. Let’s say the deposit was a gift from a family member; then the platform will create a gift letter template for the borrower to quickly review, edit, and sign — all within the same process and portal. Other examples that may require similar letters of explanation (LOEs) include:

  • Late payments
  • Address discrepancy
  • Overdraft fees

Our cloud banking platform uses automated conditions for many potential verification speed bumps with tailored solutions for different loan types, including mortgages, personal loans, and vehicle loans. By resolving these issues earlier on, we lower the amount of downstream work required.

How lending teams benefit from automated workflows and upfront verification

While Blend’s cloud banking platform increases productivity across lending teams, our automated workflows especially impact loan officers, processors, and underwriters.

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In addition to the front-loaded verification process, our automated workflows contribute to quicker turn-around times as friction decreases. For Elements Financial, rather than applications taking three weeks, customers now complete them in less than twenty minutes. And with automated follow ups, processing per loan takes 1-2 hours less. The Elements Financial team attributes these improvements to Blend’s automation of letters of explanation, asset connectivity, and overall ease of use for members.

When data collection and verification happen in the initial stages of the application, consumers are more likely to convert. Completing the verification up front keeps the borrower in step with the loan officer’s process in real time, as opposed to time-lagged manual requests for proof of income and assets and the verification delays that can follow.

When borrowers have shared their personal information, they’re more committed and invested in the process. When you do have a borrower that is committed, you have a high quality pipeline — instead of chasing leads, loan officers can spend more time being a trusted advisor to their borrowers.

The power of partnering with Blend

By collecting and connecting to data upfront, Blend’s automated loan verification relieves lending teams of sluggish bottlenecks and needless inefficiencies. Our platform also anticipates and smooths out speed bumps in the application process by automating letter of explanation workflows. At the same time, we ensure that your organization stays abreast of relevant requirements and industry best practices.

Blend’s cloud banking platform strengthens the performance of any lending team by improving productivity and shortening loan cycles.