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Brent Chandler champions cash-flow analysis in the Federal Housing Finance Agency’s public listening session on housing finance innovations

Last month, the Federal Housing Finance Agency (FHFA) hosted a public listening session soliciting input on the current landscape of innovations in mortgage finance. During the virtual forum, mortgage professionals and technologists were given an opportunity to provide input on the potential opportunities and pitfalls that technological advancements may bring to the housing finance industry in the coming years.​

A leading innovator in the fintech industry, FormFree’s overall mission aligned with the FHFA’s long-term goal for this session: to make homeownership more accessible via innovative underwriting tools and techniques. Our company was founded on the vision that everyone should have the ability to access safe and sustainable housing. We are committed to developing tools designed to bring the wealth-building benefits of homeownership to credit invisible people because a meager credit history does not necessarily indicate a real inability to repay a mortgage loan. 

Our Founder and CEO Brent Chandler took the mic during the FHFA’s listening session to champion innovations that make credit more accessible and lending more inclusive. Below is a summary of his remarks on his vision for how FormFree can leverage direct-source financial data and automated intelligence to usher in a new era of transparent, fair and liquid credit markets.

Historic lending models perpetuate the racial homeownership gap


Outdated risk assessment models have had disparate, negative impacts on Black and Latino communities across the nation, which make up an enormous portion of untapped homebuying demand. In order to better serve these communities, the FHFA understands that the mortgage industry must adopt better, more inclusive lending models. FormFree understands this as well, which is why we are committed to reshaping lenders’ historically narrow view of the credit box, which has excluded a substantial swath of families from the stability and wealth-building opportunities that come with homeownership. 

The solution lies in consumer cash-flow data


Consumers’ financial data, when reviewed by analytics that assess consumers’ true Ability-to-Pay® (ATP®), offers a better understanding of credit risk by making borrowers’ monthly income and expenses transparent to lenders. When a consumer is empowered to share their own transaction data for credit risk analysis, both they and their lender are able to make more informed decisions regarding the affordability and sustainability of a given loan. 

Consumer-permissioned, direct-source cash-flow data can be harnessed to create a credit decisioning model where truth overrides trust. With natural language processing, machine learning and non-biased, rules-based algorithms, lenders can dynamically assess consumers’ capacity to afford a monthly mortgage payment. Using cash-flow data in mortgage credit risk assessments does not just create more paths to sustainable homeownership for consumers — it also adds an additional layer of risk protection for lenders by allowing them to consider consumer cash-flow alongside traditional credit scoring models.

FormFree is leveling the playing field for credit invisible consumers


Real cash-flow data drawn directly from a consumer’s bank accounts can provide valuable insight into true ATP. The trickiest part is uncovering the story behind that data, which is why FormFree has developed powerful data intelligence offerings. Our groundbreaking Residual Income Knowledge Index™ (RIKI™) and AccountChek® verification of assets, income and employment (VOA/VOIE) solution help make lending more inclusive by capturing a more holistic view of consumers’ borrowing power and making that information available to both the borrower and lenders as a secure, non-fungible token.

This summer, Guild Mortgage became the first lender to adopt RIKI to support Complete Rate, a lending program that provides a more inclusive path to homeownership by allowing homebuyers with no credit history to permission RIKI’s assessment of their cash-flow data to potentially qualify for a lower interest rate, lower fees or both. What’s more, because RIKI’s rules-based algorithms never consider factors related to consumers’ socioeconomic backgrounds, the Complete Rate program will never inherit human biases that can lead to discriminatory loan decisioning.

That’s just the tip of the iceberg of wealth-building opportunities that consumers can unlock when lenders empower them to qualify for a loan using their real transaction data. Cash-flow intelligence provides a deeper understanding of the financial burden of a loan, so consumers can better understand their financial sustainability and wellness and make more informed homebuying decisions. 


Too many lenders have missed opportunities to grow revenue in this low-interest-rate environment by relying solely on limited risk assessment tactics. That is why FormFree is working with government-sponsored enterprises (GSEs), consumer advocacy groups and regulatory agencies like the FHFA to bring new innovation to the market that can help lenders protect their bottom lines and confidently provide underserved communities with affordable home financing options. Contact us to learn more about your organization can partner with FormFree to create a more inclusive housing market for all.


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