Today, Freddie Mac announced that its Loan Product Advisor® asset and income modeler (AIM) has been enhanced to provide clients with automated income assessment using consumer-permissioned, direct deposit account data from trusted third-party service providers like Finicity, a Mastercard company. AIM for income using direct deposits increases the confidence in income calculations of certain income types when there is enough direct deposit history sourced from trusted third-party service providers.

Finicity’s Mortgage Verification Services (MVS) is approved for this submission through AIM providing direct deposit transaction data to fuel this innovative, data-driven approach. It identifies income streams used for mortgage qualification, delivering accurate risk assessment results. 

Assets, income and employment verifications are vital to mortgage lenders looking to verify borrowers’ finances. However, between unreliable results, miscommunications and good old-fashioned paper-chases, verifying assets, employment and income can be cumbersome. MVS helps borrowers get faster approvals with fewer conditions upfront, allowing them to close and get into their homes faster. MVS can help lenders:

  • More easily assess borrower capacity/automates income calculations.
  • Reduce frustrations caused by paper submissions and reasking for documentation to verify assets, income and employment.
  • Remove subjectivity and manual errors in processing and underwriting.
  • Lower risk and probability of fraudulent activity.
  • Increase referrals.

“We are excited to see a single report for the digital verification of employment, income and assets through Freddie Mac’s direct deposit enhancement within their AIM solution,” said Andy Sheehan, Mastercard EVP of Open Banking Business. “Utilizing consumer-permissioned data and a single source of verification can help mitigate risk for lenders, create an improved consumer experience and ultimately increase overall financial inclusion by helping borrowers realize the dream of owning a home.”

Efficient Assessment

AIM leverages consumer-permissioned data from third-party service providers like Finicity, to automate the manual processes of assessing borrower assets and income.  MVS improves the success rates for identifying income and employment using data from income transactions. It can also increase the assessed income amount by providing data for a more accurate gross-up calculation.

“Adding Finicity’s Mortgage Verification Services is the next step in the evolution of AIM,” said Christina Randolph, Director, Strategic Technology Partnership at Freddie Mac. “Our partnership with Finicity has helped better identify pay deposits data to our AIM capability, using accurate and verifiable data that meet our underwriting standards. This means more opportunities for cost savings for lenders. It does all this while delivering a vastly improved lending experience to borrowers.”

How It Works

Once Freddie Mac releases this offering, lenders using Loan Product Advisor v5 0.06 or higher can use it without needing to be accepted into a controlled release program. Once turned on by Freddie Mac, a lender can automatically start using the direct deposit data generated through Finicity’s Mortgage Verification Services through a single report. Lenders can use this report by simply contacting Freddie Mac and connecting to Finicity. The report includes 24 months of direct deposit transactional history and also includes Finicity-identified income streams.

The report generated through MVS has two sections; the top section includes credits/debits for asset assessment defaults to 61 days (but can be customized up to 24 months depending on the from date), and the bottom section is up to 24 months of income stream credit transactions only.

As an added bonus, the reduced cost of implementing MVS is reflected directly in the balance sheet. On average, up to 12 days can be cut off the processing time for each loan. The hours formerly spent by loan officers chasing down borrower documents are invested in higher-return work activities such as marketing and sales to drive additional loans.

MVS is available via direct integration, SimpleNexus, ICE Technology and Finicity Reports today. Want to elevate your efficiency while enhancing the customer lending journey? Get started today.