How 3 developers aim to automate fairness, data security in lendingSeptember 14, 2021
As the Biden Administration ramps up its efforts to regulate data collection and surveillance practices, fintechs are racing to develop software products that anticipate ethical considerations in mortgage underwriting and servicing processes.
The government has long signaled its interest in acting as a watchdog over consumer information and automated decisioning. In both 2018 and 2020, the Consumer Financial Protection Bureau put out requests for input around data gathering and ownership. Furthermore, as part of his July executive order on competitive practices, President Biden asked regulators to look at data collection and surveillance practices.
Consumer-permissioned data aggregator MeasureOne recently expanded its offerings into the mortgage business. As a technology provider, “we obviously don’t play any role in the ownership of the data, and we certainly will always fall on the side of the consumer because we believe not only is that the right thing but ultimately that’s where it’s going to end up,” said CEO Elan Amir
In its setup, MeasureOne is the “trusted party.” The consumer gives their consent and provides the credentials so it can access the information, serving as a barrier between the data and the outside world. The business that will ultimately use the information does not get those credentials.
“We enable the consumer to share that data and to not have the institution be able to restrict that data, by not providing an electronic interface publicly,” said Amir. “We allow the consumer to essentially say ‘look this is my data, I’ll just share it with the requesting business,’ and in that way everybody wins.”
MeasureOne has access to more income and employment data than is used by sources the mortgage business has worked with for years to verify the information, Amir said. “We can share a much more accurate picture and much more up-to-date picture than you would have from a database that is reliant on being updated from payroll processors or other types of data sources.”
In the current system, the institution will provide access to the data and can then sell it off, Amir said.
“And so what we’ve done and what motivates us, is to use the consumer’s access to the data that they already have to [their own] benefit,” he said. “Ultimately, moving away from the aggregator monetization resale model that has dominated frankly the last 30-40 years.”
Touchless Lending by Tavant
Software developer Tavant also recently launched a product aimed at reducing the number of hands in the pot during the origination process. Touchless Lending is designed to provide an end-to-end loan manufacturing experience.
“It would be nirvana if we can take a loan from application submission all the way to clear to close without any human intervention,” said Mohammad Rashid, the head of Tavant’s fintech practice. “I doubt that can be done today.”
Touchless Lending’s first iteration is mortgage specific. “It will take an application that is submitted to a loan…