Experian and Finicity, a cloud-based financial data aggregation provider, announced Monday a collaboration that will digitize the mortgage lending process and bring some of the “credit invisible” into view for lenders.
The Digital Verification Solutions tool will digitize the mortgage process, eliminating the need for loan applicants to provide paper copies of their financial documents to verify income and assets.
The new technology has the power to reduce the mortgage loan approval process from as many as 70 days to as few as 10 days.
“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,” said Alex Lintner, President of Consumer Information Services at Experian.
“By working with Finicity, we will deliver more timely detailed information through smooth, safe processes for credit grantors to improve their businesses and dramatically enhance lending experiences for consumers by using the power of data,” he said.
The companies stated that this collaboration will make mortgage loans more accessible to the 25 percent of Americans who are “credit invisible,” such as millennials.
The Digital Verification Solutions tool takes “alternative data,” such as a consumers history of rent and utility payments, into consideration. Ultimately, lenders are able to consider a more comprehensive view of the applicant’s financial state and payment history.
“Together with Experian we’re reimagining the way the financial industry views credit decisioning, while also broadening credit inclusion for consumers, said Steve Smith, CEO of Finicity.
“Digitizing the credit decisioning process will improve the experience for lenders and borrowers while enabling further innovation in the lending space,” Smith said.
Finicity is currently participating in a pilot program with Fannie Mae to become an asset verification report supplier for the DU validation service in Fannie Mae’s Day 1 Certainty, which allows lenders to verify an applicant’s income, assets, and employment early in the loan process and avoid representations and warranties.