Compass Mortgage Finds a Better Way to Save 60-80% on Verifications
Problem
Extremely high costs for income and employment verifications coupled with poor data quality from industry-dominated providers led Compass Mortgage on a pursuit to find a better way than industry-standard practices. Not only was cost-effectiveness a concern, but the uptick in borrower friction as a result of incomplete, outdated data was compromising a smooth lending process.
Truv Solution
Verification of Income & Employment, LOS Integration (Encompass®)
About
Founded in 1999, Compass Mortgage has grown into a market leader among independent Mortgage Bankers (IMBs) in the Midwest region of the United States, while continuing to expand their footprint across 24 states.
Justin Venhousen, COO, Compass Mortgage
“In our first year with Truv vs. the alternative, we saved 60-80% on verifications. Cost savings are both obvious and significant from day one.”
The Story
For a long time, the mortgage industry’s traditional method of using instant databases to verify borrowers’ income and employment was working well for Compass Mortgage. As prices started increasing with no ceiling in sight, the lender was driven to seek alternatives. Their mission to find a better way was centered on a set of non-negotiable criteria: A new method must be easy to use, fit into the existing workflow, improve operational efficiencies, scale back cost, and deliver an optimal mortgage journey for borrowers.
Justin Venhousen, COO, Compass Mortgage
“Once you take a look at costs and vendors like Truv, you realize there’s a better way to do verifications, a more intelligent way to do this.”
Setting out with high expectations, Compass Mortgage conducted a thorough discovery process to compare Truv and other vendors, admittedly skeptical of the efficacy promised by consumer-permissioned platforms. The primary focus was on partnering with a provider who not only could offer a competitive price, but also deliver on metrics to impact the company’s ROI. The first few months with Truv were spent working together to prove the model.
Justin Venhousen, COO, Compass Mortgage
“Affordability is a huge issue in our marketplace. Price matters a lot for both mortgage companies and borrowers, which is why we turned to Truv.”
During the initial testing period with the Truv team, Compass Mortgage began tracking savings immediately, experiencing 60-80% savings on verifications compared to the incumbent provider. The margin increases were widely celebrated; however, the additional positive business impacts that quickly followed were equally important markers of success.
Justin Venhousen, COO, Compass Mortgage
“There’s no excuse for lenders to not look at a product like Truv. It works, it’s easy for the borrower, the data set is superior, you benefit from GSE approvals, and the price is more competitive. It’s a no-brainer.”
The lender attributes accelerated underwriting and processing turn times to direct-to-source payroll data. The real-time, instant verifications led to reduced back and forth with borrowers and more confident lending decisions at speed. By leveraging thorough verification reports and paystubs as needed, Compass Mortgage is consistently issuing loan approvals faster than before.
From a company perspective, the benefit of underwriting with a verification provider who delivers data that’s trusted by both Fannie Mae and Freddie Mac is two-fold: Compass Mortgage retains peace of mind knowing that the borrower’s income is accepted by both GSEs while simultaneously reducing their exposure to buybacks.
Justin Venhousen, COO, Compass Mortgage
“Truv’s POS and LOS integrations are customizable to fit into your workflow however you want, but Truv out-of-the-box also works really well.”
To maximize conversion, Compass Mortgage has implemented Truv within their loan origination system, Encompass®. The customization capabilities of Truv have enabled the lender to tailor a seamless mortgage process for loan officers, underwriters, operations and borrowers, from application to closing.
Justin Venhousen, COO, Compass Mortgage
“Conversion is good. Price is good. Borrower experience is good.”
When looking ahead, Compass Mortgage is thrilled about the growing influence of consumer-permissioned data in the mortgage industry. As a partner to Truv for three years and counting, Justin’s message to other lenders is, “The more we can get products like Truv up and running, the better off both mortgage companies and consumers will be.”