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Customer Story: Tomo mortgage

In digitizing the mortgage application process, Tomo Mortgage gives consumers a faster, more seamless experience 

Applying for a mortgage doesn’t have to be a time-consuming, stressful endeavor marked by outdated, manual processes. Tomo Mortgage is invested in modernizing the mortgage application process and putting consumers safely in control. Tomo’s technology integration with Mastercard is an important part of delivering this digital experience.

Bringing mortgages into the modern world 

Homebuyers face many hurdles, but near the top of the list are the ones that go with getting a mortgage. Consumers who apply for one must supply a lender with documentation to show they’re creditworthy and can afford to buy a home. They often spend hours scanning large documents, then emailing them or trying to upload files to their lender’s portal. Documents scanned with a shadow or a missing page require a do-over. The process can be slow, error-prone, expensive and there is a ton of back and forth. When these legacy inefficiencies are introduced, it can create a negative overall experience.  

Even after submitting their documents, consumers can wait days —or longer— to get a pre-approval letter from their lender so they can start making offers on homes. And when they’re under contract the application process can be even slower! Mortgages rarely close on time. Due to various delays, only around 40% of mortgages do. Late closings can put homebuyers at risk because sellers may be tempted to pull out of the deal and keep the homebuyer’s earnest money, which can be tens of thousands of dollars.  

Meanwhile, lenders still manually input consumers’ asset and income information to their system, leaving the door open to error and introducing unnecessary delays. Tomo knew they could do better. By tapping into new technology, they could eliminate the long-standing obstacles that legacy processes create when verifying assets, income and employment. Tomo could give consumers a modern experience, one that’s expected in today’s next-gen marketplace. 

Capturing your complete financial profile—securely 

A year ago, Tomo launched their digital-first non-bank lending company to provide mortgage loans to consumers. Their mission was to bring mortgages into the modern world, using technology to give consumers more control. By eliminating the paperwork and manual aspects of applying for a mortgage, they can give consumers confidence at one of the most stressful times of their lives.  

To make their system work, Tomo needed to help their borrowers easily and securely permission the use of reliable data. They turned to Mastercard’s open banking solutions for help. 

With just a few clicks, Mortgage Verification Service (MVS), provided by Mastercard’s wholly owned subsidiary, Finicity, allows consumers to digitally link their financial accounts to Tomo’s decisioning system to verify assets, income and even employment in minutes. Consumers no longer need to track down their banking statements, create and email pdfs, or scan and upload documents—possibly repeating the process until their home purchase goes through. 

With Mastercard’s platform and services, Tomo gets a more accurate picture of consumers’ financial situation in real-time, which helps to get consumers the best interest rate. The process is secure and efficient, helping to limit the opportunities for fraud. In addition, Tomo’s back and forth interactions with consumers have dropped by at least four to five requests per consumer after starting to use Mastercard’s solution. 

After consumers link their relevant account(s) to Tomo with Mastercard’s help, Tomo can provide underwritten preapproval in near real-time, a feat that helps set Tomo apart. Consumers can confidently make an offer on a home and know they’re going to be able to close the loan. 

Tomo consumers get final mortgage approval in an average of 20 days versus the 30- to 60-day industry standard. The ultimate goal is to have final approval match the near-instant preapproval that Tomo has already achieved. Meanwhile, Tomo’s net promoter score (NPS), an industry metric used to measure consumer loyalty, is 84% – nearly twice the national average for mortgage companies. 

Embracing the digital future 

Now, Tomo is looking forward to continuing the optimization of verification of income and assets handling and create the smartest, most consumer-friendly verification waterfall in the marketplace. This will provide up to 24 months of income history, giving lenders a more complete view of a borrower’s income.  

Additional opportunities will come from digitally linking consumers’ accounts with Mastercard’s open banking services. For example, people who rent and have borderline credit might be able to qualify for a mortgage if their banking statement shows regular and timely rental payments. Solutions like these can help with the country’s current affordability challenges by increasing access to housing — a value that’s central to Tomo. 

“Mastercard had something really special that we wanted to bring to market and have access to. We’ve found that they’re great partners, and not just technology partners, but also thought partners. When we link consumers checking account to Tomo, there’s a ton of possibility.” -Carey Schwaber Armstrong, Co-Founder and Chief Operating Officer of Tomo.  

Modernizing Mortgages

An average of 20 days versus the 51-day industry average.

Improving the Consumer Experience

Mastercard technology makes it easy for consumers to find their financial institution and seamlessly connect their accounts.

Fewer Opportunities for Fraud

Getting a more accurate picture of consumers’ financial situation in real-time with fewer back and forths reduces the chance for fraud.

Certain open banking solutions are provided by Finicity, a Mastercard company.