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Rock, paper, scissors … data (Mortgage Banking)

…Given the multitude of risks involved in relying on physical documentation (or PDFs of physical documentation), the question is: Why do mortgage originators still require it? And given that the C in CFPB stands for consumer, why aren’t we thinking more about the consumer experience?
Today’s borrowers and regulators are seeking a frictionless experience, and that means they are increasingly turning to e-banking. A June 2016 survey by The Wall Street Journal found that nearly 80 percent of respondents said that online and mobile functionality was among the most important features a bank can offer. That’s worth paying attention to, especially considering that a March 2016 report by the Federal Reserve noted that 87 percent of adults int he United States have a mobile phone and 77 percent of those phones are internet-enabled smartphones.
…So why does the mortgage industry still cling to paper — especially when it doesn’t have to? There are solutions currently on the market that provide direct access to data — not documents — to verify a borrower’s financial bona fides. These systems reach directly into the database of an official custodian of record (i.e., a bank, clearinghouse or brokerage) to retrieve the borrower’s account information. From there, the data can be analyzed automatically to develop insight into account balances, deposits, outflows, sources of funds, employment, income, account ownership, non-sufficient funds (NSF) charges, ongoing expenses that are not reflected in credit reports and more.
Lenders, servicers and investors who use these systems achieve greater security in their decisions and purchases . . . Last but certainly not least, direct data access relieves borrowers of the burden of obtaining, copying, scanning, faxing, emailing and snail-mailing — through insecure channels — pages and pages of sensitive consumer information.
This article from which this post is excerpted originally appeared in the August issue of Mortgage Banking magazine.

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