Mortgage solutions provider Floify is now going to go toe-to-toe with Equifax‘s oft-maligned workplace verification provider The Work Number, which has been criticized by mortgage lenders and regulators for years of cost increases.
Floify is the first point-of-sale system (POS) to introduce a native electronic verification of income and employment service, Sofia Rossato, the president of Floify, said in an interview with HousingWire. It is powered by Argyle, which is an authorized report supplier to Fannie Mae and Freddie Mac‘s underwriting engines. Argyle reaches approximately 90% of employers in America.
Floify’s new product, called Floify Verify, allows lenders to verify income and employment at a cost that is 60% to 80% cheaper than a legacy system like Equifax, all without the hassle of managing additional third-party vendors, said Rossato.
Lenders can embed Floify Verify directly into the loan application process to speed up loan approval. Lenders can also configure Floify Verify to be initiated by the loan teams later in the process, such as after a financial pre-screening, allowing them to better control the borrower’s experience and costs.
Additionally, the solution supports on-demand reverification—such as the 10-day pre-closing verification required for agency loans—at no additional cost.
“VOIE has been a pain point for many of our customers, with legacy verification methods achieving low success rates at a high price point. These methods are ill-suited to today’s workforce and too expensive at a time when origination costs have risen to untenable levels,” said Rossato, a 2024 HousingWire Woman of Influence.
Floify, which was acquired by Porch Group in 2021, is among several startups looking to capture market share from Equifax. Florida-based Truv (which also integrates with Floify’s system) is another that’s made strides in recent years.
Still, the firms have an uphill battle — The Work Number is still used in roughly 60% of mortgage loans, according to recent estimates.
Equifax is currently being sued by mortgage lenders First Financial Lending and Greystone Mortgage, which argue they’ve maintained a monopoly on the market.
Consumer Financial Protection Bureau Director Rohit Chopra said the product rose from $20 per pull in 2016 to $90 per pull in 2023. And for background screenings, the retail price is now $115 per pull, according to the CFPB.
“Lenders who attempt to pass on to borrowers the cost of screening applicants’ risk, do risk violating legal limitations on charging borrowers legitimate fees,” Chopra said at an industry event in the spring. “This means as the cost of screening applicants rise, the cost increase for initial screening credit reports…some mortgage lenders will choose to evaluate fewer borrowers. The steep price increases raise a lot of questions for me. Why are lenders and borrowers being charged repeatedly for the same information?”