Agarwal said life is much more complicated today, particularly with a gig economy in which workers hold several jobs, none of which provide a W-2. As a result, he said, the “need for speed” tends to focus on a select group of people, neglecting the rest.
“So, if you’re not part of that culture, then you’re not getting the service levels that you deserve and you’re not getting as many lenders serving you, so that makes your pricing worse because there’s a lack of supply,” he said. “This isn’t some kind of premeditated discrimination; it’s just market forces.”
Given that, he said, “you can’t have fair lending unless you have equality of service. Fair lending isn’t just about, ‘Did you charge one group more than another group,’ or ‘Did you approve one group more than the other group.’ Fair lending is really about, ‘Did you give equal service across the spectrum?’”
Agarwal also touted Sun West’s Morgan, its AI platform, stating that it gives his company an advantage over its competitors in speeding up the mortgage-approval process because so much of it is automated, removing human errors.
As an example, he said, humans might mistakenly put the wrong year on a document in January, such as writing 2022 when they mean 2023. Morgan won’t make that mistake, he said.
“So, what happens is then you get all pieces of your problem solved,” he said. “You get speed. You get accuracy. And you get fairness, because it doesn’t matter … how complex it is. … The AI doesn’t care.”
He added that Morgan works with all kinds of borrowers, including not just those with W-2s, but those who are self-employed, have disabilities, have low or high FICO scores, or who have gaps in their resumes, as well as for all kinds of loan types, from conventional to FHA, VA, jumbo, and more.
“We are true fair lending,” he said.
Taylor, Better’s head of real estate, said his company is working to expand eligibility for its One-Day Mortgage program, which among other restrictions currently requires applicants to have a W-2.
“We’re starting more simply,” he said, “but we have some really aggressive goals to meet the needs of the majority of the borrowers by the beginning of the busy season.” He added that Better’s goal is to meet the needs of 75% of the purchase borrowing market within two to three months, and eventually 100%.