Figure Technology Solutions has introduced a new debt service coverage ratio generation platform aimed at supporting the growth of non-qualified mortgages as well as the company’s blockchain-based marketplace.
“This launch demonstrates the power of combining AI automation and blockchain standardization to eliminate the friction that has slowed DSCR lending for years,” Anthony Stratis, vice president of lending partnerships at FIGER, said in a press release.
The New York-based fintech company claimed that the new platform has the potential to shorten processing times for DSCR issues between application and funding to as little as five days – an 80% reduction from the current average of 21 to 30 days – thanks to proprietary technology that could replace manual underwriting review. AI-powered automation will also reduce construction costs by up to 80%, she added.
The company also designed the platform that will serve brokers, lenders and investors to provide fraud prevention and savings at scale, Stratis said.
Besides AI-assisted underwriting, the DSCR platform also uses optical character recognition for document review, automated evaluation forms for refinance loans below the $400,000 threshold and private rental income verification technology.
She added that Figure’s existing lending partners can add DSCR lending through APIs.
Eric Hynes, co-founder of West Capital Lending, said his company signed on to the platform because Figure’s automated approach fits with its practice of supporting companies “that are reshaping financial services with technology.”
Non-quality management market growth
The new launch comes as part of the market in which DSCR loans fall
Securitization data from Morningstar DBRS
Besides DSCR transactions, the non-QM segment also includes bank statement loans and other financing for borrowers with non-traditional income, lending to consumers with little or troubled financial histories, and many other types of non-standard mortgages.
Between 2019 and 2022, the share of DSCR loans rose from 22% to 50% of total non-QM mortgage-backed securities, according to private lending platform Baseline Financial Technologies. These loans are based on the expected income from rental properties compared to the debts incurred. They can be used to finance investment units converted into traditional single-family rentals, and mortgage loans are also attracting interest from business owners looking to offer them.
Shape, which went public in the third quarter of this year, has been a long-time advocate and use of blockchain technology.
