Interest rates aren’t showing signs of slowing down anytime soon, especially as the U.S. economy continues to be resilient. In addition to limited supply, competition for housing may still be fierce in some regions of the country. Staying relevant amongst competitors is important when it comes to targeting new borrowers.

The shift towards digital mortgage applications and online platforms has helped enhance the borrower experience through automation and digitization. You may already have tools that help to create a seamless loan application process, whether it’s a way to upload documents, verify their assets, or help new prospects determine their eligibility for a loan.

With originations slowing down or stalling altogether, it’s time to revisit your tech stack to determine what’s giving you the best ROI and building trust in your customers. Using the best tools offers you the best chances of assessing a borrower’s financial health to provide access to your product while mitigating risk.

One of the best uses of technology? Implementing automated verification of income (VOI) and verification of employment (VOE) processes using real-time and accurate data.

According to Freddie Mac, process automation is especially beneficial for documenting income, both in the collection and assessment process, considering one-third of all purchase translation defects are due to income verification issues.

Considering that it usually takes, on average, 48 days to close on a mortgage loan, a borrower has many chances to abandon the closing process. This is especially so for those who may not fit the traditional mold of a creditworthy borrower, such as those with no-to-limited-credit history.

Confidence in mortgage underwriting processes

Earning your borrower's trust and confidence is key to ensure they go through the closing process. One significant way consumers express frustration and disappointment in mortgage lenders is through poor or opaque origination and onboarding process.

When it comes to verifying income and employment, some of these frustrations may include:

• Slow responses: Consumers want efficient and seamless experiences. If consumers have to complete tasks that require more legwork, such as finding pay stubs or wait for lenders to call their employers to verify employment, it can lead to a lot of frustration. Even if mortgage lenders use The Work Number (TWN) for income and employment verifications, it often isn’t going to deliver accurate results, leading to more manual verifications, slowing down the process even further.

•  Lack of personalization: Without real-time and accurate income and employment data, it’s hard to get an insight into a consumer’s financial snapshot. This lack of insight may lead to inaccurate recommendations, such as offering pre-approvals for mortgages beyond what consumers can afford, denying applications because of missing information, or opportunities to provide services that truly tailor to their needs.

Those who may be conscientious borrowers — including no-to-limited-credit consumers—but don't have the traditional types of data to increase their odds of approval may be left behind. This underserved market may go elsewhere unless there are more accurate means to power your VOI and VOE processes.

Why real-time payroll data matters

Using technology to access a consumer's payroll information directly offers the opportunity to improve your origination and underwriting processes and therefore build more trust. Instead of relying on static and outdated information that comes with manual processes and relying on credit reports, real-time payroll data can more efficiently power your VOI and VOE processes from end to end.

One major benefit is lower costs overall. By having a more efficient underwriting process, your operational overhead can go down. You no longer need to pass on variable and unexpected costs such as reverifications to your customers, lowering their costs as well.

What’s more, having direct access to payroll data means you’ll receive data directly from the source, eliminating any errors or missing data that could inflate your risk or undermine the underwriting process. Your consumers won’t need to complete or provide any additional paperwork since employment and income data is instantly available.

For the underserved segment, direct payroll connections provide a more comprehensive view of their finances that tends to be missing in a traditional credit history report. Not only those with no-to-limited-credit history will benefit, but also gig workers or others who don't have conventional jobs. This data can help you better understand the types of loans this segment can afford and build more trust when recommending loans that best suit them.

Investing in technology that builds the kind of trust and loyalty you want from your consumers is essential. Otherwise, your competitors will grab market share, leaving you behind. Implementing income verification software to access real-time payroll data will position your company to rise to the top of your competition, whether or not demand is high.