Analysis Featured

Mortgage Data Asset Verification

mortgage data asset verification

Modernizing banking infrastructure is no easy task, but one company has found an easy way to make it happen using the latest development techniques and tools. Borrowers expect easy-to-use solutions in this era of digitalization, but to deliver inclusive lending solutions for a broader set of borrowers, it’s very important to use data that is reliable and timely. That’s where a technologically-based solution optimized for user experience comes in. Plaid gives traditional top-notch institutions a competitive advantage by giving them access to the latest technological advancements.

About Plaid

Plaid was co-founded by Zachary Perret and William Hockey, ambitious innovators who felt that something had to be done to make financial transactions simpler and quicker, in 2012. They developed Plaid into a platform whose suite of APIs can absorb huge volumes of unstructured data and transform it into something usable.

Based in San Francisco, Plaid acts as a bridge between users’ bank accounts, banks, and third-party applications. Initially, Plaid aimed at helping borrowers access necessary information that would help them determine the right lending institution based on their qualifications and the lending institution’s requirements. The platform made borrowing easy and fast since all information was processed in real time. However, with time, Plaid started getting attention from other financial industry players, including mortgage providers, that needed real-time data verification.

To date, Plaid has raised $60 million. The latest funding round, a Series B, pulled in $44 million led by Goldman Sachs. That was in the spring 2016.

Partnership with Fannie Mae

Recently, Plaid partnered with Fannie Mae to help automate asset verification, which has been a time-consuming and tedious step in the mortgage lending process. In collaboration with Fannie Mae’s validation service, Plaid will offer a quick, simple, and more reliable way for mortgage providers to vouch and verify borrowers’ assets.

This partnership will allow Fannie Mae’s lenders access to borrowers’ financial information directly and in real time through the Plaid platform. The integration will eliminate the manual document collection and review steps from the mortgage lending process. The collaboration will also alleviate risk through Fannie Mae’s Day1 Certainty program.

According to Kate Adamson, the head of the mortgage department at Plaid, the introduction of automated asset verification in the mortgage process is a huge step from what was traditionally handled through enormous paperwork. She said Plaid are excited to have finally simplified and streamlined the mortgage application process. “Working with Fannie Mae to smooth the mortgage application process is a great example of Plaid’s mission in innovating and simplifying how consumers experience financial services,’’ she said.

Mortgage processing is one of the major components of fintech but has not yet been fully exploited. The founders of Plaid have a broader mission whereby they want to change how consumers experience financial services by using new technology to shift focus from compliance optimization to consumer operations and user experience optimization.

The Plaid platform differs from other platforms in that it focuses on helping lenders from relying on banks solely to gather and verify information. Foundations such as Freddie Mac and Fannie Mae always have to verify assets in the process of buying mortgages. Normally, the verification process involves the submission of bank statements for every account a borrower has, and in cases where there are more than one party involved, all parties must submit bank statements. The process takes from hours to a couple of days, but Plaid has reduced it to mere seconds.

To eliminate the process of uploading and downloading statements, Plaid has synced all necessary information by building relationships with over 10,000 financial institutions thus helping borrowers verify their information within seconds.

Advantages of using APIs for data verification

  • Standardized data: The relationship with over 10,000 institutions helps lenders to get standardized data that is complete and accurate. Data retrieved through APIs is also authentic and reduced the rate of fraud.
  • Automation: Since all data is synched with the platform, the process of retrieving and verifying data is automated reducing processing time. Automation also helps to reduce paperwork, which is costly in both effort and time.
  • High document integrity: Data retrieved through APIs is acquired from the source and can thereforebe trusted. Every institution wants to make decisions using updated and accurate data, which has been made possible through APIs in real-time.
  • Conversion: Initially, mortgage processing took days and was also a tiring factor that made many potential customers abandon the process in the middle. Now, the application process requires minimal effort, which leads to an increase in conversion rate.

Plaid’s key differentiators

  • An all-purpose enterprise: Most companies are dedicated to mortgage asset verification only, but Plaid is different since it offers cross-industry asset verification to ensure optimal consumer experience and satisfaction.
  • The unique drop-in module: The Plaid Link feature has boosted customer experience in many ways including ease of use, a factor that has led to the attraction of a huge number of consumers to the platform and increased conversion rate.
  • Ease of integration: Plaid is designed for developers, which makes it user-friendly. Developers can easily get started and integrate their applications without any trouble.
  • Quality integration: Having built relationships with over 10,000 banks, the quality of data processed through the platform can be deemed high quality regarding completeness and accuracy as it is updated real time.

The Future of Plaid

The company has started seeing overwhelming results with an increase in conversion rate for mortgage applications, more banks integrating with the platform, and other financial institutions planning to launch with them soon. The enterprise is also improving the technology front end and back end to facilitate efficiency from an operational point of view. Plaid is streamlining and tokenizing data as well as increasing resources, to include human resources, to sustain growth, improve efficiency, and meet market demand. The main aim of the platform is to improve customer experience by making all operations as simple and fast as possible.


Written with Ibrahim Kihugu.

Allen Taylor
Allen Taylor


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