GreenLyne adopts FormFree’s Residual Income Knowledge Index to unlock greater inclusivity in mortgage lending

GreenLyne uses RIKI to determine optimal loan terms for borrowers excluded by traditional underwriting

FormFree today announced that Inclusive-Finance-as-a-Service platform GreenLyne has enhanced its ability to help lenders identify home financing opportunities for underserved consumers with its adoption of FormFree’s Residual Income Knowledge Index™ (RIKI™).

GreenLyne technology enables mortgage lenders to finance borrowers who have the capacity to support a mortgage but typically would be deemed ineligible for home financing. FormFree’s patent-pending RIKI (pronounced “RIH-kee”) is a risk-analysis model that analyzes cash flow and residual income to ascertain a more complete picture of a borrower’s creditworthiness than traditional credit scoring alone. By incorporating RIKI into its Automated Second-Look Engine, GreenLyne can more precisely and fairly predict a borrower’s risk of default and thereby set appropriate loan terms that balance profitability for the lender and affordability for the homebuyer.

Because standard underwriting models are unable to assess default risk for borrowers who have thin credit files or FICO scores below 660, these borrowers are often excluded from housing finance. According to the Urban Institute, more than 39 million Americans have a credit score between 600-660 and are mortgage-ready, yet struggle to obtain a mortgage.

“Too many consumers who have a steady income and dutifully pay their bills on time are being excluded from homeownership because mortgage lenders haven’t had tools to assess their ability to pay. In effect, these consumers are being punished for an industry’s weakness, which is profoundly unfair,” said FormFree Founder and CEO Brent Chandler. “We are proud to provide GreenLyne with RIKI’s residual income analytics so it can pave a more inclusive path to homeownership for a large cohort of Americans.”

“GreenLyne’s fair lending credit underwriting innovation provides a precise path to safely and soundly expand homeownership for a large, unfairly underserved segment of Americans,” said GreenLyne CEO Syeed Mansur. “We are delighted to forge a deep partnership with FormFree, which couples a new era of consumer financial data with breakthrough advances in high accuracy credit risk prediction and fair underwriting that optimally balance affordability for borrowers and profitability for lenders.”

 

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