Previous The mortgage industry is evolving, and so are borrowers. Truework, a Checkr Company co-founder and President Ethan Winchell sits down with Allison LaForgia to discuss how mortgage verification must adapt to a workforce increasingly relying on gig and 1099 income. As borrowers’ income becomes more complex, lenders face challenges ranging from traditional verification gaps to compliance hurdles, and Winchell breaks down what they need to know to keep pace with today’s workforce.
“How can we create a way for any time a consumer is applying to anything — mortgages, apartments, jobs, government benefits — they can compile and share the information they need to about themselves to get approved for the thing,” Winchell said. “It turns out we do that today for income and mortgage, but it’s really a much bigger problem that we’re solving over time.”
That challenge, he said, has grown dramatically as the workforce has changed.
“When we started the company, it was still — even for just a wage earner, a W-2 and a pay stub — the best automation solutions only worked like, say, three out of 10 times,” Winchell said. “So seven out of 10 times, you still have to go and do a bunch of manual stuff, collect documents, make phone calls just to do it.”
And that was before layering in today’s broader range of qualifying income. “I think the GSEs have . . . 21 different types of income that you can use to qualify for a loan,” he said. “You basically end up with hundreds and hundreds of different pathways you could go down just to get all of the income for one individual person.”
For Winchell, the weakness of traditional verification is that most systems are built to handle only the simplest cases. “Most of the automation systems are only set up for the happy path, which is like, I make enough income from my one job to clear the income threshold that I need,” he said. “And that path is a far minority of times that that is actually what’s happening on the ground.”
Today’s borrowers may have two part-time jobs, be self-employed, or earn income from a business they own and operate, in addition to rental income and other sources. “There’s so many exceptions in mortgage,” he said, and most companies “really struggle to handle the multivariate.”
The opportunity, he said, is to serve more borrowers without increasing risk by staying tightly aligned with the rules already in place. “This comes down to just making sure you are, for most lenders, just following the GSE guidelines,” Winchell said. “The hard part is structuring those rules into an SOP . . . and then making sure they’re actually following those things.”
Truework’s role, he said, is to sit in the middle: “We’ll get the data, we’ll make sure the data is processed in a way that the GSEs have said, yes, this is the correct way … and then make sure that that is the aggregated number that the lenders are using to actually do their underwriting.” He described that simply: “You make compliance easy.”
That balance between automation and support is central to how Winchell sees the market evolving. “There’s so, so, so many exceptions that you’re never going to build for 100% of the long tail,” he said.
That is why Truework has paired technology with service from the beginning. “Actually being able to physically pick up the phone and speak to a human on our team and say, here’s a problem . . . that’s why we publish our customer support scores,” he said. “The other end of that phone call, there’s a person trying to close a home loan.”
Looking ahead, Winchell said Truework’s mortgage mission is to help “every lender, big and small” use “all 21 different types of income to qualify for loans, put more people in homes,” while also expanding into adjacent areas like rental screening, fraud prevention and government eligibility verification.
