Plaid integrates Home Lending Report into Encompass

"Plaid said many lenders still rely on manual document collection because some verification solutions struggle to gain borrower adoption. Plaid's approach replaces document-based verification with an account-linking process that allows borrowers to connect their bank accounts. The company said the method is familiar to many consumers and can simplify the verification step in the mortgage application process."

"According to Plaid, up to 80% of borrowers complete account linking during loan application flows using its platform, which can reduce the need for follow-up requests and manual processing by lending staff. Once borrowers connect their accounts, Plaid generates the Home Lending Report that appears within the Encompass dashboard."

"The report includes up to two years of consumer-permissioned financial data including categorized deposits and withdrawals, average balances, nonsufficient-funds counts and income derived from assets. The data provides lenders with a more current view of a borrower's financial position compared with traditional document-based verification."

Mortgage origination costs have increased 35% over three years while loan volumes remain pressured, forcing lenders to improve operational efficiency. Plaid addresses this by replacing traditional document-based verification with account linking, allowing borrowers to connect bank accounts directly. This familiar process achieves 80% completion rates and reduces manual processing needs. The integration generates a Home Lending Report within Encompass containing two years of financial data including deposits, withdrawals, balances, and income information. This provides lenders with current borrower financial positions. The solution supports agency loans through Fannie Mae and Freddie Mac, qualifies for representations and warranties relief programs, and integrates with Day 1 Certainty and asset/income models, eliminating system switching during underwriting.

Read at www.housingwire.com