How Lenders Can Reshape the Evolving Mortgage Lending Process

Ma-Keba Frye  |  March 11, 2021   |  Credit & Lending  |  ID Verification  


Fueled by the pandemic’s impact, along with low interest rates, low inventory, and high consumer demand, mortgage lenders hit an origination record of $3.57 trillion in 2020. During this time, leading lenders reshaped their internal processes to keep up with the increased volume, the shift to remote operations, and higher online fraud risk. As 2021 takes off, profitability will depend on how lenders respond to the latest trends affecting growth and innovation in the mortgage lending process. 

Increase fraud protection methods

The limited access to face-to-face interactions has made lenders subject to synthetic identity fraud schemes. In 2020, successful fraud attempts against mortgage lenders increased from 36 percent to 55 percent. As the mortgage lending process evolves, lenders will need to establish trust with borrowers while also protecting themselves from fraudulent activity.

In 2020, successful fraud attempts against mortgage lenders increased from 36% to 55%.

A recent Giact study showed that once a fraud operator accesses a system to take over an account or create a synthetic identity, it becomes challenging to prevent a loss from occurring. For that reason, it’s essential to take the necessary steps to block fraud attempts before access is gained. Integrating automated prevention tools like digital verification early on into the mortgage application process can keep synthetic identity fraudsters at bay. 

Bridge the homeownership gap to create new opportunities

With nearly 50 million Americans lacking the sufficient credit history needed for a traditional credit score, too many people lack the credit they need to purchase a home. Concerns surrounding payment ability of thin-file or no-file borrowers are valid, but there is a way lenders can gain better visibility into these borrowers instead of outright rejecting them.  Access to consumer-permissioned payment data can help mortgage lenders analyze borrowers’ monthly expenses and payment behavior – information not included in a traditional credit score. 

Expanding to the previously underserved consumer can potentially increase lenders’ loan volume by at least $1.5 trillion.

While some consumers may seem invisible, many are consistently paying rent, utilities, streaming services, and phone bills, thereby showcasing that they are actually at low risk for default. Expanding to the previously underserved consumer can potentially increase lenders’ loan volume by at least $1.5 trillion. With over 10 million mortgage-ready homebuyers, this is a market ready for better credit access. 


Learn how access to alternative data can support business growth for lenders


Leverage automation to improve efficiency and reduce losses 

With the integration of automation into the mortgage lending process, lenders can reduce losses and improve efficiency. As the second most common type of fraud, occupancy fraud results in lower interest revenue for lenders. These losses can even turn into uncollectable debt over time. By leveraging automation, lenders can reduce the chances of uncollectable debt. 

When assessing mortgage applicants, turning to utility payment histories as a means for additional identity and address verification can reveal inconsistencies in applications, especially in synthetic borrowers. It is unlikely that an applicant using a synthetic identity will be able to provide proof of consistent utility payment history at a residential property that aligns with the address provided on the application. 


See how this mortgage lender automated proof of occupancy verification >>


Fraud attempts don’t end at the close of a mortgage loan. For FHA and VA loan compliance, lenders must also verify occupancy in the post-loan process. Automated collection of utility bills from the newly purchased home can help lenders rapidly detect fraudulent property investors and straw buyers

In addition to the risk of online fraud, high loan volumes are resulting in heavier workloads for employees. Incorporating automation can help reduce the burden on staff, especially those currently scanning and reviewing paper documents. With direct and automated access to phone and utility payment histories, lenders can eliminate manual, time-consuming tasks and streamline the identity and address verification process.

Modernize the mortgage lending process with Urjanet 

Implementing the right technology for fraud protection will save lenders losses, employees time, and borrowers the hassle. With reliable and digital access to consent-based utility data, mortgage lenders can better fight fraudsters, improve efficiency, and expand revenue opportunities. 

Through the Urjanet Utility Data Platform, lenders can connect directly to their customers’ utility accounts for secure and seamless address verification. To learn how to integrate automated utility bill access into your mortgage lending process, set up some time to speak with one of our experts today.


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About Ma-Keba Frye

Ma-Keba Frye is a Content Marketing Associate at Urjanet, assisting with content development and execution. When she's not writing, she enjoys reading, listening to music, and volunteering.

Tags   Credit   |   Financial Services   |   FinTech   |   Identity & Fraud   |   Identity Verification   |   Lending   |   Non-Traditional Data   |   Urjanet   |   Utility Bills   |