The ROI of Payroll Connections in Mortgage Lending

How ongoing, consumer-permissioned access to income and employment data can decrease your costs, increase your conversion rates, and boost your bottom line

When you issue a mortgage, ensuring you can deploy funds quickly and confidently is table stakes in today’s market. More elusive but just as critical is the ability to gather unique insights into the profitability of your loans, so you can better forecast the growth and health of your portfolio down the line.

There are several ways to improve your profitability, but the most impactful is connecting directly to consumers’ payroll platforms and streaming real-time, credentialed income and employment data straight from the source. Compared to legacy verification methods and other, non-permissioned data providers, payroll connections not only support faster, more confident credit decisions, they reduce your overall costs and optimize your chances of conversion.

Below, we break down the differences and take a closer look at the factors behind them.

How real-time payroll connections optimize profitability

Lower price tags are impactful on their own, but it first helps to understand what’s working beneath the surface to drive results. The benefits of direct, real-time payroll connections like Argyle’s span a few key categories:

Decreased costs

In addition to lowering the price tag normally associated with verification and eliminating reverification charges altogether, payroll connections limit your operational costs by minimizing the amount of time and labor that goes into each loan. This also means you can process more applications faster, potentially boosting the total number of high-quality funded mortgages.

Increased efficiency

Payroll connections automate income and employment verification workflows, precluding the need for manual processes and paperwork and accelerating your time to close. What’s more, with continuous access to verified income and employment data, you can make quicker, more confident credit decisions.

Better borrower experience

Using a credentialed, consumer-permissioned platform like Argyle gets borrowers involved and invested early in the process and streamlines the steps they need to take (from an average of two days down to 17 seconds)—making them much more likely to convert.

Higher data quality

Static reports from credit bureaus and other data providers typically offer limited insights. Argyle’s comprehensive income and employment data set offers a granular view of a consumer’s salary, wages, and work history that’s always accurate and up to date, minimizing your overall risk.

Together, these factors mean a more seamless lending experience for your borrowers and your team—and more successful outcomes for your business.

Quantifying the savings of direct payroll connections

Based on our clients’ experience, the cost of verifying income and employment through a legacy provider—that is, a non-permissioned data source with a static database—is typically between $40 and $60 per verification. We’ll say $40 to skew conservative. With direct payroll connections, that same process costs around $10 to $15 for a larger lender. If that lender is verifying a modest 300 applications a month (or 3,600 a year), that works out to:

With direct payroll connections, they’re saving at least $100,000 per year (or 75%) on initial verification costs alone.

Keep in mind that legacy solutions treat verifications as a one-time deal, making lenders pay full price for every reverification throughout the loan origination process—and beyond. That means the $144,000 estimate above should actually be multiplied by the total number of reverifications to arrive at the true annual cost. With Argyle, free, unlimited reverifications are included in your plan.

How a direct payroll connection works

Argyle offers a web-based platform called Console to connect consumers’ accounts, or you can embed our intuitive consumer interface, Argyle Link, into your point of sale (POS) or loan origination software (LOS). That allows consumers to share their income and employment data with just a few clicks—and without ever leaving your application:

1. A consumer selects their payroll provider from our comprehensive network and enters their account credentials.

2. You’re connected directly to their payroll account and get real-time, ongoing access to verified income and employment data.

3. You instantly receive GSE-compliant income and employment verification reports, up-to-date pay stubs, and any past W-2s you require to verify a borrower.

That means they can skip the paystub scans and uploads, and you can stop worrying about whether the data you have on file is an accurate reflection of their financial health.

Realize ROI with Argyle

Visit our mortgage page to learn more about how Argyle’s powerful payroll connections are transforming the industry—or sign up for a free account to try our VOI and VOE solutions out for yourself.