Blend's Instant Home Equity application is designed to provide a quick and efficient loan approval process by automating data collection and verification, reducing manual intervention, and streamlining the overall workflow. Learn what a borrower's experience looks like with Instant Home Equity.
- Starting an Instant Home Equity application
- USPS Property Verification
- Identity Flow
- AVM (Automated Value Model) Integration
- Property Details
- Liabilities Flow
- Income
- Decision Management
- Loan Details
- Debt Consolidation
- Homeowners Insurance
- Flood Check
- Mortgage Liabilities
- Rental Income
- Hard Credit Consent
- Instant Decision/End of Application
- Declaration Questions
- Digital Close
Note: The Instant Home Equity experience may vary based on your organization's specific configurations.
Starting an Instant Home Equity application
For applicants who begin an Instant Home Equity application through Single Sign-On (SSO), the property address will be automatically populated. They will only need to confirm that the information is accurate. Non Single Sign-On (SSO) applicants will begin by providing the property address.
Blend will check the state eligibility after submitting the property address. If the property is in an eligible state, the application will proceed onto USPS validation. The state eligibility for the product can be configured by the lender. If the property address is not in one of the approved states, the application flow will end.
USPS Property Verification
The USPS Property Verification will take place during the subject property address part of the application, after state check. There are three possible outcomes for USPS Property Verification:
- Exact match - When there is an exact match, the address is verified and borrower moves on.
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Different address without new address suggestion - The borrower is recommended to enter a new address.
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Different address with suggestion - The application presents a suggested change and asks the borrower to confirm.
Identity Flow
The personal information workflow will ask for first name, last name, phone number, date of birth, SSN/ITIN, and marital status. There is a tooltip indicating that a soft credit pull will be done after this screen. Consent and terms of use policies will be listed below that the applicant will need to agree to.
If the response for marital status is separated or unmarried, an additional drop down question will appear asking about any other individuals with property rights.
We will also ask for address on the same page to consolidate the flow. The same mailing address field is automatically checked. For users with different mailing addresses, they can choose to unselect it and populate a different mailing address.
AVM (Automated Value Model) Integration
Automated valuation models (AVMs) runs in the background at the end of the liabilities flow and it uses real estate information such as comparable sales, property characteristics, and price trends to provide a current estimate of market value for a specific property. Blend can integrate with any AVM vendor allowing for better data accuracy than manually entered property information. This information is then used in underwriting decisioning.
Property Details
Property type drop down options are currently set as single family, condominium, townhouse, and two to four unit property.
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Single Family - A free-standing structure that doesn’t share walls or doors with another building.
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Condominium - An individually-owned unit in a building or complex with multiple units.
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Townhouse - A home that shares walls with other homes placed side-by-side.
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Two to Four Unit Property - A building or complex with 2–4 units owned by the same person.
Answering “No” to the intend to user property as your primary residence will display the additional question of “Will this home equity line of credit be used on an investment property?”
At this point, financial institutions can off ramp users if they select “Yes” to the investment property question. Off-ramps can be configured by your organization administrator.
If the user's mortgage payment does not include escrowed property taxes, the application will provide an estimated annual property tax amount.
An additional field will also appear if the property has an HOA.
Liabilities Flow
Credit Pull
Blend customers can configure the credit score threshold that allows applicants to proceed on with the application. If credit is above the threshold, applicants will proceed onto the main AVM workflow. If credit is below the threshold, the application will be moved onto the decline screen and the workflow will end. If there is a co-applicant, credit is pulled jointly for both users. Credit pull occurs behind the scenes, so there is only a decline screen for this workflow.
Fraud Check - IDV
Identity verification with fraud check happens in the background after the main identity workflow and after a hard credit pull.
Income
Blend Income Verification queries income data from providers and delivers income data in order to enable financial institutions to verify income and employment in a home equity application. This income amount will be used to generate the proposed offer.
If there is no instant income match, applicants will be asked to manually enter their income information. Applicants will be asked to connect to their payroll provider or fill in all their employment details in the last two years.
Decision Management
Decision Management occurs after the income workflow and delivers instant decisioning by running automated reviews based on your credit policy requirements. Borrowers will receive one of the three potential outputs.
- AVM successful → Offer displayed
- AVM - no response / did not run → Offer displayed with property value caveat
- Manual review required → Skip offer page and user will continue to fill out the application
If they accept the offer, they will proceed to the next portion of the application, loan details.
Borrowers can explore a different amount.
Applicants can try to qualify for a larger amount by adding a co-applicant. If they choose to add a co-applicant, the next screen will be collecting personal information on the co-applicant. The applicant's flowI mirrors the application workflow for the primary borrower. Identity verification and a soft credit check will be done on the co-applicant. If they fail either, they will be moved to the decline screen. The co-borrower will also need to provide their income information.
Loan Details
The loan details flow will ask the borrower the reason they want the line of credit and if the line of credit will be primarily used for business purposes.
- Debt consolidation
- Home improvement
- New home down payment
- Refinance
- Other
If the line of credit purpose is not debt consolidation, new home down payment, or home improvement, users can select the “other” field and a text box will show up.
Debt Consolidation
Debt Consolidation pulls information from a credit report and surfaced in a simple checklist to allow the consumer to decide what debt they are looking to consolidate with their line of credit. This workflow will appear regardless if the loan purpose selected at the beginning was debt consolidation and the applicant has active liabilities on their credit report. Applicants can simply deselect any of the listed liabilities if they don’t want any of their debt consolidated.
If the applicant has a co-borrower, they will have their own debt consolidation screen.
All the unpaid balances will then be calculated to get the total amount of debt. If the total amount of debt exceeds the loan amount, the applicant will be routed back to the debt consolidation page.
Applicants will need to remove one or more line items so that the debt amount is lower than the loan amount. When that logic is fulfilled, applicants can move onto the next step of the application.
Homeowners Insurance
Blend Homeowners Insurance Verification enables the delivery of evidence of homeowners insurance through a connectivity service or by manually uploading the policy. If our verification provider is able to find the applicant’s home insurance policy, it will be pulled up and applicants will be asked to confirm the policy. If we are unable to find the policy or if the policy is not correct, applicants will have the opportunity to manually submit their policy.
If the user does not have homeowners insurance, they will be asked to get it.
Flood Check
Blend Flood Insurance Verification enables consumers or Customers to deliver evidence of their flood insurance to verify existing insurance coverage.
Flood zone data is pulled earlier in the flow. The data is then used to determine whether or not the borrower’s property is in a flood zone. If the property is in a flood zone, the application will ask for flood insurance annual premium otherwise nothing will happen.
For properties in a flood zone, Blend's verification provider will find the flood insurance carrier. There is a possibility that the verification provider will have already pulled the flood insurance in the initial homeowners insurance workflow. If that’s the case, the applicant will move directly onto the declarations section.
If the applicant says that they do not have flood insurance and are located in a flood zone, they will be required to submit a follow-up about their flood insurance.
If the property is not in a flood zone, the applicant will move onto the mortgage liabilities section.
Mortgage Liabilities
Mortgage liabilities will be skipped if the user fails the fraud check.
If the applicant has mortgage liabilities, they will show up on the screen following identity verification. If the applicant has no mortgage liabilities, they will be routed to the consent screen.
Rental Income
Applicants can optionally add additional rental income in this step.
Hard Credit Consent
At this stage, a hard credit check will be done on the applicant.
Instant Decision/End of Application
After the consent section, the application will do a hard credit pull which will inform the instant decision.
There are two potential pathways at the end of the application. If the applicant has been on track, they will receive a pre-approval result. If they have been moved off of the instant decisioning track, they will need to review in-app disclosures and send off the loan application for the customer’s team to review.
Declaration Questions
Declaration Questions are a set of questions to help identify the consumer such as the Home Mortgage Disclosure Act (HMDA).
The declarations section can be configured to the customer’s preferences. There are a number of preset questions for compliance purposes and then the customer can choose to add more declarations questions if they would like. The three main areas of declaration questions are liability, credit, and collateral.
Know Your Customer (KYC)
Know Your Customers is a service that delivers the evidence of identity. KYC is the process of identifying and verifying a consumers or end users’ identity when opening an account and periodically over time.
The KYC declarations section will ask a series of questions to determine residency status, former address, work status, and political office. The KYC report with all the responses can be found in the documents tab in Banker Workspace.
If applicants have lived in their current address for less than two years, they will need to add in information about their prior address.
Lastly, applicants will be asked if they’ve ever held a political position outside of the US. If they have, applicants will need to answer additional questions about the position they held. Otherwise, users will move forward to the Demographics section.
Demographics
The demographics section covers questions around gender and ethnicity. Similar to the other sections of declarations, customers can add additional questions if they would like.