Customer success Story: Intercoastal
Intercoastal and Mastercard: A Seamless Digital Mortgage Experience with Affordable Income and Employment Verifications
Intercoastal Mortgage is partnering with Mastercard Open Banking to minimize the paperwork, as well as stress, that comes with the mortgage application process while also driving down loan origination costs.
Ending the headaches of paperwork
Intercoastal Mortgage has a simple mission—to provide a seamless customer experience with the least trouble when customers apply for a mortgage to purchase their home. Mastercard Open Banking is helping that mission remain a reality.
Buying a home is a deeply personal and emotional experience for most people and getting a mortgage can be stressful. In fact, Zillow reports that more than half of Americans cry at least once during the mortgage process and the numbers are even worse for Gen Z and Millennials. What drives them to tears? Mostly, it’s gathering the mountain of paperwork needed for a mortgage loan application, including paystubs, W2s, bank statements, savings and brokerage statements, or alimony and divorce records. Documents can get lost or require regular updates. A single incorrectly uploaded document can delay approvals. As a result of various delays, only about 40% of mortgages close on time*. When things go wrong, customers can lose their dream home and lenders, like Intercoastal, can lose a valued customer.
Allowing open banking to streamline the application process
To make life easier for customers buying a home, Fairfax, Virginia-based Intercoastal Mortgage decided to refresh its mortgage application process by creating a seamless, digital customer experience. They wanted to save time for both customers and staff, as well as integrate borrower financial data verification directly into their digital application experience.
Intercoastal has been a long-time user of Mastercard Open Banking’s Mortgage Verification Services, provided by Finicity, a Mastercard Company, and initially focused on using open banking for digital asset verifications. But, with the rising cost of income and employment verifications, they decided to further their partnership to use the firm’s new affordable credentialed payroll Verification of Income and Employment (VOIE) service. Mastercard account managers helped incorporate VOIE directly into Intercoastal’s borrower loan application experience through nCino Mortgage. This allows borrowers to permission access to their payroll account data and VOIE information is then populated directly into the loan application, mitigating the need to collect income documentation or to manually input the information.
The new approach reduces the need for applicants to find, scan and upload myriad income documents to a portal
Not only does the Mastercard Open Banking VOIE solution provide a streamlined experience for borrowers, and an affordable solution for Intercoastal, it provides lenders with income representation and warranty relief eligibility through Freddie Mac via its Loan Product Advisor® (LPASM) asset and income modeler (AIM) solution, and also through Fannie Mae via its Desktop Underwriter® (DU®) Day 1 Certainty® program. This enables Intercoastal to utilize the automated underwriting services provided by Freddie Mac and Fannie Mae, reduce risk, and close loans more confidently.
Faster closing times, happier homeowners
Using Mastercard Open Banking solutions and a streamlined application process, Intercoastal can approve and close a customer’s mortgage loans within a week or two, as opposed to the industry standard of about 45 days. And the lender is making smarter and faster decisions while also driving down costs. The result, Intercoastal executives say, is doing a better job of living up to its mission of providing the best customer experience with the least trouble.
“Mastercard Open Banking’s new credentialed payroll enhancement was one of the simplest product launches we have done. The new experience integrated smoothly into our existing processes with no impact to loan processing workflows and an efficient borrower experience. We are excited to digitize our loan application experience with a much more cost-effective way to verify income and employment.”
— Josh Cilman, Intercoastal Mortgage Executive Vice President at Intercoastal Mortgage
Eliminating paperwork
The Verification of Income and Employment (VOIE) service reduces the need to collect income documents from borrowers and digitizes application forms, populating data in the correct fields and all but eliminating the possibility of human error. The result is a more automated and streamlined underwriting process.
Accelerating closings
Open banking powers Mastercard’s verification reports, which can then be assessed by Freddie Mac‘s LPA and Fannie Mae‘s DU automated underwriting systems. Based on the latest annual assessment of mortgage cycle time data by Freddie Mac, their digital offerings can produce up to 8 days of savings in closing cycle time, which translates into cost savings of nearly $190 per loan.
Source reference: 2024 Cost to Originate
Elevating customer experience
By ensuring a smooth and speedy application process, Intercoastal helps customers obtain their dream homes and retains more valued customers.
Driving down costs
Intercoastal can drive down costs by using an affordable VOIE solution while also accelerating the time it takes to get loans to closing.
Intercoastal Mortgage, LLC Company NMLS ID # 56323
*This is an industry-wide metrics and is not representative of Intercoastal Mortgage or any specific lender’s results
Certain open banking solutions are provided by Finicity, a Mastercard company.