David Kawata sounds like “a man on a mission.”
So said Mortgage Media’s S.A. Ibrahim, during a recent conversation with the CEO of Docitt Inc., a company founded five years ago to develop technology to verify borrowers’ asset, income and other data instantly, from the source. And Kawata is, indeed, hoping to demonstrate to the mortgage industry — especially to the likes of independent mortgage banks like the one he started in — that adopting this sort of automation, this sort of framework, is going to be the wave of the future. It is ignored at one’s peril.
“I feel that they need to understand what the wave, the change, is gonna be. And if they don’t get ahead of it, technology-wise, automation-wise … change their business process — then a lot of these really great people that have dedicated their lives for home ownership, they won’t be here in the next five years,” Kawata said. “I think that we have an opportunity to really help a lot of people.”
Kawata founded Docitt in 2014 to enable mortgage lenders to originate more loans, quicker and better, by getting data instantly from the sources: tax returns, pay stubs, W-2 forms and the like. The goal is to make the whole process more efficient through greater transparency from the start.
“We just felt that if we get the data from the source, we could automate all the analysis and really strip out a lot of the process that we are burning with today in the mortgage industry,” Kawata said, noting that a lack of transparency on credit files was a big contributor to the financial crisis of 2007-08. “… I really want to solve that problem.”
The demand is certainly there, he noted, and it’s “huge.”
“I think everyone wants lower costs, improved loan quality, and to have better customer experience for all the stakeholders, so the demand’s been really great. Our customers are demanding more automation, more data from the source,” he said. He referred to Fannie Mae’s “Day One Certainty” initiative — which validates borrowers’ income and asset data using Fannie-approved third-party vendors — as a similar, complementary step in that direction. “We’re getting traction on those opportunities,” he said.
As for barriers to capturing the data? There is of course, the issue of privacy, as some may feel threatened by such ease in obtaining their financial information.
“Privacy is a huge issue, and whose data it is,” Kawata said. “I think the biggest issue is, is it the banks’, the tax preparers’, or is it the consumers’? That’s the big question, on whose data it is.” The answer varies depending on who’s being asked — consumer advocates on one hand, lenders and those who back and guarantee loans on the other. Other challenges include technological issues — trying to get a secure API (application programming interface) directly from the source to monitor and audit — and make sure it has the fidelity that all parties involved need.
Kawata said Docitt tries to reassure borrowers that their data will be secure, noting its CIO has 20 years’ experience in cybersecurity and that the company utilizes multiple application security and encryption measures. “We effectively meet all industry standards, and we really try to make sure that security becomes our talking point that we lead with instead of an afterthought,” he said. The goal: Know your customers and make them as safe as possible.”
By and large, surveys are showing borrowers are in favor of 24/7 access to data from the sources — especially if it’s a systematic, wholistic part of the mortgage application process from the beginning. “When we’re building this all into one, a seamless experience, it makes sense,” Kawata said. “The risk/reward for the consumer — now they’re getting more comfortable with it.”
So how does a CEO five years into a start-up aimed at helping revolutionize the industry find time for his family?
“Prioritization, blocking out boundaries,” he said. “One of the most important things is, when my daughter’s home I try to keep my phone in the office, so there’s blocks of time. It’s date night. It’s just prioritization, time management. There’s not a lot left, so it’s try to get some sleep. Some.
“Make sure the family gets their time, and then everything else is the job.”