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To be competitive in an era of accelerating consumer expectations, deploying a seamless application experience for personal lending, mortgage, tenant screening and other use cases is a must. Slower, resource-laden manual processes invite higher consumer drop-off rates, introduce inefficiencies and can be vulnerable to fraudsters.  

Mastercard Open Banking, provided by Finicity, a Mastercard company, is equipping its customers with the capabilities to deliver smarter and more efficient digital lending experiences.  With the expansion of its Verification of Income and Employment (VOIE) solution to include credentialed payroll, Mastercard Open Banking enables consumers to permission access to their payroll account data, mitigating the need to collect income documentation.  

A more efficient digital experience within the loan application process is precisely what open banking customers need – and credentialed payroll delivers a seamless, secure income and employment verification process, and reliable data at speed. The latest VOIE innovation populates consumer-permissioned data directly into the correct fields, creating a fast, secure digital experience that can boost profitability while making life easier for your applicants and employees.  

Strong partnerships that drive industry-leading innovations 

Mastercard Open Banking teamed up with industry-leading payroll data aggregator Argyle to power this expanded VOIE solution. With 90%+ coverage of the U.S. workforce, financial institutions can now digitally verify an applicant’s income and employment in just moments.  

“We’re excited to partner with Mastercard Open Banking to make digital verification of income and employment widely available through our trusted network of consumer-permissioned connections,” said Brian Geary, COO at Argyle. “Together, we are creating smarter lending experiences, free from time-consuming manual touchpoints while achieving faster and more accurate verification​s​,” he added. The combined capabilities of Mastercard Open Banking and Argyle are driving VOIE to be an efficient, flexible solution that comes in at a much more affordable price point than other income and employment verification options, poised to benefit financial institutions and consumers alike. 

“Mastercard Open Banking’s new credentialed payroll enhancement was one of the simplest product launches we have done,” said Josh Cilman, EVP at Intercoastal Mortgage. “The new experience integrated smoothly into our existing processes with no impact to loan processing workflows and an efficient borrower experience. We are excited to digitize our loan application experience with a much more cost-effective way to verify income and employment.” 

Multiple verification solutions to fit your business 

Credentialed payroll is just the latest addition to Mastercard Open Banking’s growing list of digital income and employment verification solutions for smarter and faster decisioning. 

Mastercard Open Banking’s Deposit Income verification solution analyzes direct deposit streams from the consumer’s permissioned bank account data to identify an applicant’s income.  

Freddie Mac launched Loan Product Advisor® (LPASM) asset and income modeler (AIM) for income using direct deposits in March 2022 with Mastercard Open Banking as an initial service provider. In March 2024, Fannie Mae announced general availability of Deposit Income as part of their Desktop Underwriter (DU®) validation service. These solutions help streamline the mortgage origination process for lenders and homebuyers while expanding opportunities for home ownership. 

Mastercard Open Banking solutions are used by financial institutions and decision makers in varied use cases, including mortgage lenders, tenant screeners, personal lenders, credit card issuers and more.  Credentialed payroll and Deposit Income solutions provide financial institutions with the high conversion, affordable income, and employment solutions they seek.  

Bank account and payroll account data can be used independently or in combination to enhance the customer experience depending on the institution’s needs and workflows. 

Partner with Mastercard to create better consumer experiences 

The Mastercard Open Banking platform delivers next-generation financial experiences that delight consumers. The platform serves as a one-stop shop for digital verifications, with the capabilities to verify assets, balances, income, employment, cash flow and much more, seamlessly and at scale. Credentialed payroll and Deposit Income solutions are available today through Mastercard Open Banking’s lending solutions. 

In partnership with Mastercard Open Banking, with services provided by Finicity, a Mastercard company, Fannie Mae continues to work toward improving access to affordable housing with secure banking-powered technologies, speeding up the application process for lenders and reducing the need for manual document preparation.

In addition to helping lenders validate assets and assess a borrower’s rent payment history and cash flow, Fannie Mae’s Desktop Underwriter® (DU®) validation service gives lenders the power to verify a borrowers’ income and employment information using a single 12-month asset report. This digital enhancement is saving lenders time while enhancing the borrower experience.   

Demand for a better mortgage process 

Traditionally, borrowers have been asked to manually collect and share stacks of sensitive income documents with mortgage loan officers, a time-consuming and less secure process that creates inefficiency for both the borrower and the lender. 

A complete digital verification solution for mortgage lenders 

DU provides a digital option that simplifies and removes friction from the application process. When applying for a mortgage, borrowers can access Finicity’s user-friendly Connect consent flow to link their bank accounts, enabling their data to be easily shared with the lender.  

With one report from Finicity, DU can help lenders validate a borrower’s asset, income and employment information while simultaneously analyzing cash flow and rent payment history to help approve more potential homeowners.  

All the verifications needed to process a mortgage application can be conducted on the spot, without paperwork.  

Fannie Mae’s latest innovation leverages Mortgage Verification Service (MVS) from Finicity as a leading report supplier to power the verifications needed to process a mortgage application.  

“With Desktop Underwriter® (DU®), lenders can now get even more benefits from using a single 12-month asset report. We continue to look for ways to help lenders streamline their validation processes and improve the borrower experience, and this latest enhancement helps them do just that.” 

Peter Skarnulis, Fannie Mae Vice President, Business Account Management Solutions

Want to elevate your efficiency while enhancing the customer lending journey? Get started today. 

Give consumers a priceless asset: more time. Endless errands, work tasks and countless obligations big and small chip away at their free time and fill their schedules. Applying for a loan shouldn’t add to that.   

To power a faster, better mortgage experience for consumers, Freddie Mac’s Loan Product Advisor asset and income modeler (AIM) continues to evolve, now including paystub data in addition to direct deposit data for income assessment. These cost-saving efficiencies provide increased rep and warrant coverage while continuing to meet Freddie Mac’s strong credit underwriting standards.

Open banking drives new mortgage capabilities

Using consumer-permissioned data from trusted third-party providers like Mastercard (with some services delivered through Finicity, a Mastercard company), direct deposit plus paystub increases the confidence in income calculations by matching digitized paystub data to borrower direct deposit history sourced from trusted providers. 

Mortgage Verification Service (MVS) supports this new AIM capability by providing direct deposit transaction data paired with digitized paystub data to fuel this innovative, data-driven approach. It identifies the income stream that matches the paystub, 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 paperchases, verifying assets, employment and income can be cumbersome. MVS helps borrowers get faster approvals with fewer conditions up front, allowing them to close and move into their homes faster.  

“Partnering with Mastercard ensures we can deliver the best tools and insights the industry has to offer. This collaboration will assist lenders with quickly and easily obtaining income verification.”

Daniel Miller, Freddie Mac Single-Family Director of Strategic Technology Partnerships

MVS can help lenders: 

Efficient assessment 

AIM leverages consumer-permissioned data from open banking providers like Mastercard to better identify pay deposits using accurate and verifiable data that meets Freddie Mac’s underwriting standards. Lenders can automate the manual processes of assessing borrower assets, income and employment. This can improve the success rates for identifying income and employment by reading information provided on a paystub and verifying income transactions within a borrower’s bank account. 

“Partnering with Mastercard ensures we can deliver the best tools and insights the industry has to offer,” said Daniel Miller, Freddie Mac Single-Family Director of Strategic Technology Partnerships. “This collaboration will assist lenders with quickly and easily obtaining income verification.” 

How it works 

Previously, direct deposits to a consumer’s bank account would qualify for rep and warrant assessment. With enhanced direct deposit and paystub capabilities, a borrower or a loan officer can upload a paystub and the technology will match the data on that paystub with the deposits from the borrower’s asset report, boosting the rep and warranty success rates and income gross-up.

The asset report can include 24 months of direct deposit transactional history and also includes income streams identified by the open banking platform. Now, with the added paystub capability, Mastercard can add a paystub report that can provide greater success assessing income through direct deposits.  

The paystub report generated through MVS has two sections; the top section includes digitized paystub information. The bottom section is up to 24 months of income stream credit transactions only. These income streams are reconciled with the deposits shown on the asset report.  

As an added bonus, the reduced cost of implementing MVS is reflected directly in the balance sheet. On average, up to 7 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. The new AIM capability will be available to Freddie Mac-approved Sellers using Loan Product Advisor beginning June 7, 2023. MVS is available via direct integration and ecosystem integrations including SimpleNexus & ICE Technology and Order Reports Service in the Client Hub today. 

Want to elevate your efficiency while enhancing the customer lending journey?  Get started today.

In today’s digital age, consumers have come to expect experiences that are quick, convenient and easy to use. These expectations are exerting more pressure on the mortgage lending process and causing many lenders to rethink their current workflows and customer experience.

In this video, we discuss the effects that open banking and real-time data are having on mortgage lending, and how industry innovators are using this data to streamline homebuying for both lenders and borrowers. Join us to talk about the impact of Freddie Mac’s release of automated assessment of direct deposit income, insights into how the leveraging of new data sources will impact future underwriting and how lenders like Intercoastal Mortgage are already utilizing these tools to win in a tightening market.

To learn more, visit https://www.finicity.com/mortgage. To request a demo, visit https://www.finicity.com/mortgage-demo.

Getting a mortgage has traditionally been a long and challenging process. Customers have had to dig up paystubs and bank statements to hand off to loan officers. Loan officers and processors then manually uploaded the paperwork into the lender’s database for review and then hope for the best. When a borrower sent an incomplete document or a processor made an error in data transposition, it could delay the loan approval process by days, even weeks.

But in today’s climate of rising interest rates and low inventory, those long wait times have gone from just annoying to potentially costing house hunters the chance to close on the homes they desire. For example, serious buyers should arrive at each showing with a pre-approval letter in hand, in order to be competitive. Even those just browsing will need to move quickly if the right house comes up. And those refinancing—yes, even as rates are climbing, there are borrowers who could save by refinancing—must act fast to nail the lower rate in place.

These inefficiencies and delays were troubling to Guaranteed Rate, who, as the second-largest retail lender in the U.S., has been helping to make the mortgage process easier since 2000.

Two years ago the company decided to look into taking its underwriting process digital. There was a lot on the line. The mortgage industry sets a high bar for the financial data used to underwrite loans, requiring documents from verified institutions. What’s more, borrowers share some of their most sensitive financial information to secure a loan. Guaranteed Rate was committed to protecting the consumer’s privacy and financial data.

What Guaranteed Rate came up with is a platform that enables customers to go online or use a mobile app to grant permission for the lender via a third-party service to access their financial and payroll accounts. That lets the lender quickly and accurately verify assets, income and employment.

If everything checks out, the lender can give the borrower a quick thumbs-up. In some cases, that’s all the data the lender needs for the mortgage to go forward. This digital verification process can cut up to eight days off the underwriting process. “From an efficiency standpoint, our underwriters don’t have to manually verify income and assets for every loan, so we can scale up,” says Brad Lando, Senior Vice President of Strategic Development, Guaranteed Rate.

The company protects borrowers’ sensitive data by using Mastercard’s open banking platform. When a borrower grants a lender access to their data, Mastercard’s technology issues a token. The token allows the lender to see the data, but never house it. Nor does the lender receive login credentials. The risk of those credentials being hacked during the mortgage process is reduced, and the customer gets a better experience.

Another advantage is that borrowers can grant ongoing account access for prolonged periods of time, such as 60 days. That means the lender can refresh the data as needed without having to go back and ask for renewed permission to track down more documents, alleviating the burden on the consumer. “It’s cut down on risk, in addition to bringing a better customer experience,” says Lando.

Loan officers and processors have been quick to adapt to this digital-first method. The automated verification system allows them to sign off faster on more straightforward loans, which frees them up to focus on the more complicated ones.

And while there’s still some trepidation among consumers, they’re also starting to see the benefits. When offered a choice to manually upload their documents or grant permission for the lender to pull their information, 83% of borrowers who chose the digital path said their loan processing time was shorter than they expected it to be, or that it met their expectations.

As digital verification becomes more prevalent, the mortgage process will speed up, from application to close. And that means more people can look forward to a smoother process on the way to landing in the homes they want to live in.

GSE-approved income, employment and asset verifications lead to a better mortgage experience for applicants, homebuyers, loan officers, underwriters and processors. Mastercard’s Emily Flinders walks you through our Mortgage Verification Service, where consumers can safely and simply connect their financial data to build a better mortgage.

Revised July 1, 2022

This week, Freddie Mac announced the latest Loan Product Advisor® (LPASM) enhancement that includes on-time rent payments as part of the company’s purchase determinations.

Mastercard, a designated third-party service provider for Freddie Mac, is excited to provide two reports for lenders that include rent payment history.

Our Mortgage Verification Services (MVS) product provides the consumer-permissioned data necessary for LPA’s rent payment history credit assessment with no setup required for the lender. If you’re already using an MVS asset report, you will automatically send the data necessary for a rent assessment.

Mastercard’s open banking platform (provided by Mastercard’s wholly-owned subsidiary, Finicity), is a designated service provider that offers a digital, single-vendor solution for assets, income and employment through both Freddie Mac and Fannie Mae. By automating the asset and income assessment process, we can also provide transaction data for rent payment history, direct deposits and 10-day pre-closing reports for employment verification. These solutions help to streamline lenders’ loan approval process and increase homeownership opportunities to qualified borrowers.

Rent Payment History in Lender Credit Decisioning

By virtue of sheer numbers, millennials are defining the trends of today’s housing market. The age group now accounts for 43% of all homebuyers so far in 2022, according to a new report by the National Association of Realtors. With approximately one-third of this demographic being credit invisible, there’s an opportunity to incorporate additional data sources to help establish creditworthiness and the ability to repay the loan. The integration of rent payment history into the mortgage lending process can be helpful to first-time homebuyers who have a strong track record of on-time rent payments, creating a new path to homeownership while still promoting safe lending.

In addition to this week’s announcement from Freddie Mac, Fannie Mae has included rent payments in their automated mortgage credit decisioning process in Desktop Underwriter® (DU®) since September 18, 2021. Fannie Mae identified recurring rent payments in bank statements and transaction data as a factor which could deliver a more inclusive credit assessment.

Fannie Mae said 17% of applicants who have not owned a home in the last three years and who did not receive a favorable mortgage recommendation could have instead received an “approved” or “eligible” recommendation if their rental payment history had been considered. 

To take advantage of the rent payment history feature, Mastercard provides a Verification of Asset and Income (VOAI) and a Verification of Assets (VOA) report through its Mortgage Verification Service (MVS) that includes 12 or 24 months of transaction data that Freddie Mac and Fannie Mae can use to identify rent payment history that may provide a more favorable credit assessment.

If they are using the VOA report, lenders have the freedom to access either two or 12 months of data to satisfy their own underwriting requirements. The reports can be called with a direct API or are available currently in ICE Encompass and Encompass Consumer Connect, as well as the SimpleNexus mortgage point-of-sale (POS) platform. 

Integrated with Freddie Mac and Fannie Mae Systems

Mastercard is a service provider for Freddie Mac’s automated underwriting system, LPA, which automates the assessment of borrower assets, income and employment using LPA asset and income modeler (AIM). By leveraging the expertise of service providers, AIM helps to deliver a simpler, more efficient loan origination process.

Fannie Mae’s DU validation service also accepts our mortgage verification services to independently validate borrower assets, income, and employment data—providing Day 1 Certainty® on validated loan components. By digitally validating secure third-party data through DU, you can help eliminate the paper chase and help get your borrowers approved quicker.

Learn more about Mortgage Verification Services here or request a demo from one of our open banking experts.

According to a recent study from Mastercard, consumers say obtaining a mortgage is a serious pain point in an already painful homebuying process. The survey shows that 89% of homebuyers find the mortgage process to be equally or more stressful than the homebuying experience. 

Borrowers whose lenders used digital mortgage verifications were less likely to say the loan process was the most stressful part of buying or refinancing a home, and 83% of respondents using digital verifications said their loan processing time was shorter than expected or met their expectations. 

As a designated third-party service provider of Freddie Mac, Finicity, a wholly owned subsidiary of Mastercard, offers an integration of its open banking data and Mortgage Verification Services (MVS) with AIM that allows clients to automate the capacity assessment using consumer-permissioned data, direct deposit account data and work history. In the case of income, lenders can now look at direct deposit history to verify income. 

Click here to read the MReport article by Andy Sheehan, EVP Open Banking about how Mastercard’s open banking platform (provided by Mastercard’s wholly-owned subsidiary, Finicity) is moving the mortgage process into the digital future.

Mastercard’s open banking platform (provided by Mastercard’s wholly-owned subsidiary, Finicity) offers pre-close reports that provide just the right data that GSEs need for 10-day verification of employment. Today, Freddie Mac announced the acceptance of our Verification of Employment (VOE) Reports. 

In adding the VOE Payroll and Transactions reports to our Mortgage Verification Services (MVS) product, we have enabled lenders to receive only the data GSEs require for the 10-day verification. Lenders can use these reports to view only your borrower’s employment status, rather than refreshing the full reports that contain more data than required for an employment verification. This minimizes the introduction of new income data or other redundant and unnecessary underwriting changes that could delay the loan closing or cause additional work.

The two available reports provide different types of information. The VOE Transactions report contains 120 days of refreshed transactions with dates and description, but no amounts or totals so income is not reassessed. It shows the latest direct deposits in the income streams, to confirm the  borrower is still being paid on their regular cadence.

Another option is the VOE Payroll report. This contains only employment status and details—no income or other data—so lenders can see that the individual is still employed according to their payroll provider.

These two reports are part of MVS at no extra charge and are currently available for lenders connecting directly to Mastercard and through Ice Mortgage Technology.

The VOE Transaction and Payroll reports can help lenders improve accuracy and simplify the process of verifying employment within ten days of closing, removing more friction from the loan origination process without increasing risk. With one click, a GSE-accepted VOE report is available in moments, avoiding the lost time and the uncertainty of tracking down verbal verifications from employers.

How can you access these 10-day pre-closing reports?

To pull the VOE reports today, your team will need to code directly to the endpoints or add this functionality through Encompass LOS from Ice Technology. You can find documentation here. To see Mastercard’s Mortgage Verification Services in action, request a demo here.

Want to learn what borrowers want from a digitized mortgage process powered by open banking solutions? Click here.

Freddie Mac has unveiled new automated underwriting capabilities that allow lenders to verify assets, income and employment using borrower-approved bank account data. On June 1, 2022, this functionality will be available to mortgage lenders nationwide through the asset and income modeler (AIM) in Freddie Mac Loan Product Advisor® (LPASM), the company’s automated underwriting system.

Mastercard’s open banking platform (provided by Mastercard’s wholly-owned subsidiary, Finicity) is a service provider for this capability. The VOE Transaction and Payroll reports can help lenders improve accuracy and simplify the process of verifying employment within ten days of closing, removing more friction from the loan origination process without increasing risk.

Read more here.