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OFFICE OF FINANCIAL TECHNOLOGY

FHFA’S VELOCITY TECHSPRINT

AN ANALYSIS OF KEY THEMES IN DATA DIGITIZATION AND TECHNOLOGY 

INNOVATION IN MORTGAGE ORIGINATIONS

December 2023
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

Table of Contents

1. Introduction ........................................................................................... 2

2. The Challenge ......................................................................................... 3

A. Velocity TechSprint Design 4

B. Velocity TechSprint Solutions 5

3. Key Themes ............................................................................................ 8

A. Theme 1: Enhancing Consumer Education and Empowerment 9

B. Theme 2: Improving Trust in a Fragmented Mortgage Ecosystem 12

C. Theme 3: Optimizing Mortgage Technology Solutions to Further Adoption 13

D. Theme 4: Building Trust in Digital Solutions 15

E. Theme 5: Unlocking Affordable Supply for Underserved and First-Time

Homebuyers 17

4. Next Steps ............................................................................................ 19
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

1. Introduction

The Federal Housing Finance Agency (FHFA) uses regulatory TechSprints as a collaborative 

approach to encourage responsible innovation in the mortgage finance sector. The TechSprint 

model seeks to bring together participants from across and outside the financial services sector to 

develop technology-based concepts or solutions to address industry-wide challenges. These 

initiatives promote a proactive stance on responsible innovation by shining a light on barriers and 

pain points, widening discussions and perspectives, and enabling the exploration of new ideas. 

In July 2023, FHFA held its first TechSprint. Named “Velocity,” the TechSprint brought 

together technology service providers, academics, regulators, and mortgage industry experts to 

broadly explore innovative, digital solutions that further promote efficiency and cost savings in 

mortgage origination processes. Over the four days of the Velocity TechSprint, 80 participants 

from 60 entities were divided into 10 teams and set upon a common challenge: How might data 

digitization drive transparency and increase access, fairness, affordability, and sustainability in 

mortgage lending?

The Velocity TechSprint was intentionally designed as an “ideation” TechSprint to maximize 

innovative thinking and explore the mortgage ecosystem’s vision for the future of mortgage 

technology. The ideas showcased at the TechSprint exemplified the innovative spirit of the 

event. In addition to showcasing the potential uses of emerging technology in mortgage finance 

processes, the TechSprint participants (Sprinters) explored the fundamental themes and barriers 

that underpin the adoption and utilization of data-driven technology in the landscape of mortgage 

origination. 

This document serves to summarize and bring public awareness to the key themes that were 

uncovered through the Velocity TechSprint, including the challenges that may inhibit the broader 

adoption and integration of data digitization and technology in mortgage origination, and 

potential pathways for addressing these challenges. By publishing this thematic summary, FHFA 

hopes that readers will gain insights into the key pathways to leveraging technology and data in 

mortgage origination, paving the way for a more efficient, transparent, and accessible future in 

the mortgage industry.1

1 Please see FHFA’s blog post, Recapping FHFA’s Velocity TechSprint (October 2023), for a day-by-day recap of 

the TechSprint, including summaries of Opening Day, Demo Day, and the Observer Track panel sessions. 
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

2. The Challenge

The financial services sector is rapidly changing, driven by consumer demand for faster, more 

efficient, and transparent services. However, despite the widespread adoption of digital 

technology in various consumer lending products, the continued reliance on paper-based 

processes in mortgage origination has become an increasingly cumbersome and costly problem. 

According to the Mortgage Bankers Association (MBA) Quarterly Performance Report, 

mortgage production costs have doubled over the past decade, rising from approximately $5,300 

in 2012 to $10,600 in 2022.2

 Some of these increasing costs can be attributed to inefficiencies in 

the loan manufacturing process,3 affecting both the operational expenses of lenders and their risk 

management, as well as the overall experience of homebuyers.

Research indicates that mortgage lenders who embrace digital solutions tend to have lower costs 

and produce higher-quality loans. A 2023 study by Freddie Mac found that lenders with a higher 

adoption of digital solutions have 40 percent fewer loan defects compared to those with lower 

digital adoption rates.4

 Furthermore, lenders with higher digital solution utilization originated 

loans that had, on average, approximately 14 percent lower production costs, equivalent to a 

savings of about $1,700 per loan.5

 Digital solutions can also enable lenders to process loans 

more quickly, leading to reduced operating expenses. Freddie Mac’s 2021 Cost to Originate 

Study showed that mortgage processes integrated with digital and technology offerings can save 

up to 18 days in closing cycle time.6 Despite the availability of digital solutions, substantial room 

for adoption remains, with at least 50 percent of lenders still using paper in their origination

processes.

7

Homebuyer sentiment surveys indicate a rising interest among homebuyers in the broader 

adoption of digital mortgage tools, particularly since 2020 with the in-person challenges to the 

mortgage process presented during the COVID-19 pandemic. In addition to using online 

platforms to submit financial documents, prospective buyers are displaying a growing inclination 

towards utilizing digital platforms for tasks such as pre-qualification processes, gaining a better 

understanding of the mortgage process, exploring various loan options, receiving real-time 

2 MBA Quarterly Performance Reports, cited in Freddie Mac, Digital Innovation Drives Loan Quality (February 

2023).

3 Ibid.

4 Ibid.

5 Ibid.

6 Freddie Mac, Cost to Originate Study: How Digital Offerings Impact Loan Production Costs (November 2021). 7 Infosys, Accelerating Digital Transformation in the Heated Mortgage Industry (2021).
4 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

updates on their loan status, and scrutinizing the final details of their loans.8 Lenders who have 

committed to digitization efforts have observed that these initiatives effectively enhance the 

overall homebuyer experience and engagement.9 While this trend reflects a rising interest in 

using digital tools, research also suggests that first-time homebuyers may be less likely to utilize 

such tools, highlighting the ongoing importance of homebuyer education and the preference for 

at least some level of human interaction to complement the digital mortgage process.10

A. Velocity TechSprint Design

FHFA organized the Velocity TechSprint with the intention of diving deeper into the challenges 

and potential opportunities associated with the expanded use of data digitization and technology 

in mortgage lending. To develop problem statements for the Velocity TechSprint, FHFA 

leveraged public responses to the Request for Information (Fintech in Housing Finance: Request 

for Information) issued in July 2022,11 and insights from external outreach conducted by FHFA’s 

Office of Financial Technology. FHFA developed an umbrella problem statement and five 

focused statements aimed at addressing: 

• Expanding the utilization of direct-to-source data approaches and automated verification

processes in mortgage lending;

• Addressing challenges related to the adoption of existing digital mortgage tools;

• Identifying opportunities to further enhance and align data standards in mortgage

processes;

• Identifying opportunities for incorporating alternative data in credit underwriting; and

• Enhancing the digital mortgage experience so that homebuyers have greater access to, are

better prepared for, and have greater confidence in the use of technology in the mortgage

process, and lenders and other participants are trained in a more digitized process.

8 Fannie Mae, Q1 2021 NHS Special Topic Survey - COVID-19, Mortgage Digitization, and Consumer Satisfaction

(2021).

9 Douglas Duncan, Fannie Mae, Lenders Discuss Loan Costs and Efficacy of Recent Tech Investments (October 

2022).

10 Urban Institute, FinTech Innovation in the Home Purchase and Financing Market Impact and Gaps (July 2019) 11 See FHFA, Fintech in Housing Finance: Request for Information (July 2022) and FHFA, Summary of Responses 

to the Request for Information on Fintech in Housing Finance (March 2023).
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

To optimize engagement in these broad areas over the short period of the TechSprint, FHFA 

intentionally designed the Velocity TechSprint as an “ideation” TechSprint, with a desire to 

prioritize community building, collaborative brainstorming, and idea generation across the 

mortgage ecosystem over the development of specific prototypes or proof-of-concept solutions. 

Several teams also created applications and visual guides over the course of the TechSprint to 

demonstrate how their solutions could engage potential homebuyers. 

B. Velocity TechSprint Solutions

Through their Demo Day presentations and active engagement with FHFA afterward, Sprinters

provided valuable perspectives on the issues surrounding data digitization and technology within 

the mortgage industry, along with potential approaches to tackling these challenges. Prior to 

delving into these viewpoints in more detail, this document begins with a brief summary of the 

10 solutions showcased during Demo Day, which will provide context for the discussion 

ahead.

12

Team Apex (Down Payment Assistance) 

• Team Apex proposed the creation of a Down Payment Assistance (DPA) portal with the

aim of enhancing access to and engagement with DPA programs among potential

homebuyers. This portal would serve as a centralized hub, offering standardized

guidelines and prerequisites for the over 2,000 DPA programs offered across jurisdictions

nationwide. It would also furnish prospective homebuyers with information regarding

DPA programs aligned with their particular circumstances. Furthermore, the portal would

facilitate matching potential homebuyers with participating lenders and housing

counselors and provide a resource throughout the homebuying process.

Team Fidelis Data (Trusted Data Repository) 

• Team Fidelis Data proposed a central repository of verified mortgage data to eliminate

the repeated due diligence that mortgage lenders, investors, servicers, and other

ecosystem stakeholders perform throughout the life of a mortgage loan. The central data

repository would include an upfront data extraction and verification process before

receiving a trusted seal, signifying the data as a trusted source for mortgage ecosystem

12 For video of the 10 team presentations, see the Velocity TechSprint Demo Day video on FHFA’s YouTube 

channel.
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

stakeholders. The central data repository would be set up and managed through a 

collaboration between public and private entities. 

Team FINnovation (Consumer Data Utility) 

• Team FINnovation proposed the establishment of an industry collaborative utility

focused on enhancing consumer education and empowerment before embarking on the

mortgage application journey. This utility would integrate with primary financial data

sources, automating upfront verification of the data. It would also grant prospective

homebuyers the ability to manage the sharing of their data with mortgage lenders and

other stakeholders throughout the mortgage process. As part of its consumer education

efforts, the utility would harness generative artificial intelligence (AI) to offer

personalized educational materials for prospective homebuyers. Additionally, it would

monitor and identify potential biases in the mortgage process.

Team Home4All (Home.gov Portal) 

• Team Home4All proposed the establishment of a government-backed website, home.gov,

designed to serve as a reliable, centralized resource for information pertaining to the

mortgage process and the various conventional and government-backed loan options.

Among other features, the home.gov platform would offer personalized financial

education services to prospective homebuyers, facilitated by a combination of chatbots

powered by generative AI. With the prospective homebuyer’s consent, the home.gov

platform would use pre-verified, permissioned consumer data to evaluate the

homebuyer’s mortgage readiness. Those deemed likely to qualify would be directed to a

lender marketplace to explore loan options.

Team Home Renew (Home Renovation Tool) 

• Team Home Renew proposed the development of a resource to facilitate access to a

supply of affordable homes, specifically catering to underserved and first-time

homebuyers. This resource would offer potential homebuyers a centralized listing of

affordable homes in need of renovation, along with educational materials to empower

them with the knowledge required to make informed purchases and plan for the necessary

renovations.

Team Mini Mae (Blockchain Origination) 

• Team Mini Mae proposed a blockchain or distributed ledger technology (DLT)-based

method to simplify the collection and verification of a prospective homebuyer’s financial

data during and prior to the mortgage process and continuing through the life of the loan.
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

The proposed solution aims to utilize DLT to create a centralized, trustworthy source of 

financial data. The DLT would serve as the primary source of information for 

homebuyers when they are searching for a mortgage lender and as a vital data source for 

mortgage lenders and other ecosystem stakeholders during their due diligence processes. 

Team Speed Racer (Uniform Data Trust Platform) 

• Team Speed Racer proposed a solution to create a system for verified mortgage data,

aiming to eliminate the need for repetitive due diligence conducted by mortgage lenders,

investors, servicers, and other participants in the mortgage ecosystem over the life of a

loan. Their proposal featured the establishment of a central data authority responsible for

designating trusted data providers, tasked with verifying the authenticity and accuracy of

mortgage data throughout the loan’s lifecycle, and issuing verification keys using

cryptographic technology. This central data authority would be set up and managed

through a collaboration between public and private entities.

Team Tech Toc (Special Purpose Real Estate Investment Trust) 

• Team Tech Toc proposed the creation of a special purpose Real Estate Investment Trust

(REIT) designed to facilitate access to the nation's available stock of affordable housing,

including Real Estate Owned (REO) properties. The special purpose REIT would acquire

second homes, rental, and vacant properties and offer underserved and first-time

homebuyers an initial opportunity, with DPA, to purchase these homes before making

them available to other investors. The special purpose REIT would also provide ongoing

support to homeowners after the purchase, providing them with educational resources and

tools to sustain homeownership.

Team Trust.Me (Consumer-Owned Data Sharing) 

• Team Trust.Me proposed a solution aimed at broadening credit access for underserved

homebuyers, including individuals who could potentially benefit from incorporating

alternative data into the mortgage underwriting process. This solution would collect a

prospective homebuyer’s financial data directly from sources such as cash apps, utilizing

it to generate a consumer confidence index score that would evaluate their

creditworthiness and mortgage readiness.

Team U-Turn (“No-to-Yes” Tool)

• Team U-Turn proposed the development of a No-to-Yes tool designed to assist

individuals whose mortgage applications were initially declined in improving their

creditworthiness and ultimately securing approval. This tool would pinpoint the specific
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

reason(s) for the denial and, utilizing generative AI, provide tailored solutions for 

remediation to the applicant. It would leverage data provided by housing counselors and 

lenders while also offering resources to aid applicants in implementing the recommended 

remediation steps and monitoring their progress. 

3. Key Themes

Following the conclusion of the TechSprint event in July, FHFA embarked on a series of 

activities aimed at gaining a deeper understanding of the concepts presented during the 

TechSprint. This included analyzing the underlying challenges and issues that were highlighted 

by the Sprinters, as well as the potential ways in which technology can help tackle these 

challenges. This approach was grounded in FHFA’s broader, thematic approach to responsible 

innovation which includes: 

• Identifying and understanding potential opportunities for removing barriers to innovation

in the mortgage ecosystem, balancing the value of new ideas, products, and operational

approaches with the need for effective risk management and governance;

• Understanding the underlying challenges to innovation as experienced by mortgage

ecosystem stakeholders and, for the Velocity TechSprint, a particular emphasis on

prospective homebuyers and mortgage lenders; and

• Understanding the technical and stakeholder landscape of financial technology and

innovation in the mortgage ecosystem.

Building upon the Demo Day presentations, the Sprinters were invited back for in-depth sessions 

to dive deeper into the key features presented in their solutions and the challenges they aimed to 

resolve on behalf of stakeholders. FHFA also gathered insights from stakeholders within the 

mortgage ecosystem by discussing the TechSprint at various speaking engagements and 

engaging in external outreach activities. These activities ultimately helped FHFA identify and 

frame the five key themes that are explored in this section. 

Figure 1 (below) showcases the five key themes that emerged during the post-TechSprint 

evaluation. Following the introductory visual, this section offers narrative overviews of each of 

the five themes, along with a discussion of stakeholder feedback on the prevailing industry 

challenges and the desirable solutions specific to each theme. While digital solutions with some 

of these features exist today, stakeholders emphasized the importance of not only expanding the 
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

breadth and depth of the homebuyer and lender services provided by these solutions, but also 

combining standalone solutions where possible to further industry adoption. 

Figure 1: Introduction to Velocity TechSprint Themes

A. Theme 1: Enhancing Consumer Education and Empowerment

The mortgage process involves numerous steps, legal documents, and financial considerations, 

which can be daunting, especially for first-time homebuyers. While there are currently financial 

education resources available for homebuyers, they are frequently decentralized and require 

homebuyers to actively seek authoritative information and guidance from trusted advisors to 

successfully navigate the process. Additionally, as the demographic landscape of the United 

States evolves, many interactions associated with the mortgage process are increasingly 
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

conducted in other languages, underscoring the additional obstacles ethnic minorities may 

encounter when they seek reliable assistance and navigate the process of securing a mortgage.13

During the TechSprint, FHFA heard that financial education resources related to mortgages 

could be further centralized and enhanced to provide more practical information to better prepare 

prospective homebuyers for the mortgage process and assess their mortgage eligibility before 

initiating an application. Some Sprinters placed specific emphasis on identifying opportunities to

improve the delivery of information regarding DPA programs. This focus stemmed from the 

significant level of interest among underserved homebuyers in these programs.14 Within the 

theme of consumer education and empowerment, Sprinters also noted that underserved and firsttime homebuyers, particularly from racial and ethnic minority backgrounds, may harbor 

concerns about their mortgage eligibility and have less confidence in the educational resources 

and financial support offered by financial institutions.15 They highlighted the potential for 

government agencies to offer reliable, authoritative guidance on the mortgage process and better 

meet the needs of these potential homebuyers. 

Efforts are being made by Fannie Mae and Freddie Mac (the Enterprises), under the oversight of 

FHFA, to bolster homebuyer education and preparedness for the mortgage application process.16

Within the broader umbrella of their Equitable Housing Finance Plans, the Enterprises have 

undertaken initiatives that focus on expanding access to educational resources and counseling 

services, including those related to DPA, particularly for underserved communities. The aim is to 

empower potential homebuyers with the knowledge and tools they need to make informed 

decisions about sustainable homeownership, navigate the complexities of the mortgage process, 

improve their overall readiness to secure a mortgage, and subsequently enable sustainable 

homeownership. These homebuyer education and preparedness initiatives, along with others set 

out in the Enterprises’ Equitable Housing Finance Plans, help promote equitable access to 

homeownership opportunities and mitigate barriers that have historically disadvantaged certain 

groups in the housing market. 

13 Fannie Mae, The Consumer Housing Journey: With a Closer Look at the Experience of Black and Latino Renters 

and Homeowners (2023). 14 Ibid. 15 Freddie Mac, Perceptions of Recent Mortgage Borrowers by Race/Ethnicity: Insights from the National Survey of 

Mortgage Originations (January 2023). 16 The Enterprises’ Equitable Housing Finance Plans set out three-year roadmaps designed to help overcome 

inequities in the housing market. To review the Enterprises’ Equitable Housing Finance Plans, see Fannie Mae, 

Equitable Housing Finance Plan (2023) and Freddie Mac, Equitable Housing Finance Plan (2023).
11 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

Figure 2: Enhancing Consumer Education and Empowerment – 

Sprinter Observations on Challenges and Potential Solution Features

Sprinter observations on current challenges Sprinter observations on desirable solution features

Educational resources on mortgages are provided 

in a decentralized manner and may not come 

from authoritative sources.

• Solutions that evaluate a homebuyer’s mortgage

eligibility and recommend personalized actions

to improve their ability to qualify for a mortgage.

This was identified by Sprinters as a potential

use case for AI.

• Solutions that provide personalized educational

resources for prospective homebuyers. This was

identified by Sprinters as a potential use case for

AI.

• Government website, or resources, designed to

serve as a reliable, centralized resource for

information pertaining to the mortgage process.

• Offering underserved and first-time homebuyers

centralized listings of underutilized, yet

affordable homes that require investment or

renovation, along with resources and tools to

assess the cost of renovation and to renovate.

• Program enhancements and tools that offer

underserved and first-time homebuyers an initial

chance to buy affordable homes in need of

investment or renovation before making them

available to other investors, such as institutional

investors. These offerings might also provide

supporting educational resources to equip

homebuyers with the knowledge to make

informed purchases.

Prospective homebuyers may not find 

educational resources on mortgages helpful when 

the resources are not personalized to their 

financial circumstances.

Prospective homebuyers may not know their 

mortgage readiness and may enter into a 

mortgage application process before they are 

ready.

Prospective homebuyers might lack the necessary 

knowledge to understand the financial 

commitment, process, and contracting support 

required for home renovation.

Prospective homebuyers may not be fully aware 

of opportunities to purchase underutilized yet 

affordable homes that require investment or 

renovation, including REO properties. 

Adverse action notices are not reader friendly and 

do not practically explain the reason(s) for a 

mortgage denial. 

• Improving adverse action notices to make it

easier for a homebuyer to understand the

reason(s) for a denial. Sprinters noted that this

might require government action.

• Opportunities for further digitization of adverse

action notices.

• Educational resources provided to homebuyers

at the time of an adverse action notice.
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

Sprinter observations on current challenges Sprinter observations on desirable solution features

Information and resources on DPA programs are 

provided in a decentralized manner, making it 

difficult for homebuyers and lenders to identify 

prospective programs. 

• A central source of information on DPA

programs to enable homebuyers to easily

identify programs for which they might qualify

and match them with lenders and housing

counselors.

• A central source of information on DPA

programs that is integrated with point-of-sale

and loan origination systems and provides for

portfolio-level rather than transaction-level

searching.

• Establishing a common data standard for all DPA

programs.

DPA solutions may not always have up-to-date 

information on active DPA programs, qualification 

requirements, and the level of available funding 

for the year. 

B. Theme 2: Improving Trust in a Fragmented Mortgage Ecosystem

A common observation among Sprinters was a lack of trust in data that is exchanged among 

mortgage ecosystem stakeholders during the mortgage origination process and throughout the 

loan lifecycle. Because of due diligence expectations on mortgage lenders and the challenge of 

tracing mortgage data back to its source, stakeholders repeatedly conduct due diligence on the 

same mortgage data using decentralized sources or paper documents throughout the life of the 

loan to verify the data’s authenticity and accuracy. The repeated due diligence, sometimes 

referred to as “check the checker,” contributes to the cost and cycle time of mortgage 

originations and impacts broader industry adoption of automated processes for verifying 

homebuyer income, assets, and employment. 

Trusted data flowing through the entire mortgage process from origination through the loan 

lifecycle could create significant efficiencies and eliminate the need for multiple points of 

reverification. Given the lack of data trust and related fragmentation in the mortgage market, 

Sprinters identified a need for greater government involvement to help establish a trusted source 
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

of homebuyer financial data and minimize the need for repeated due diligence throughout the life 

of the loan. 

Figure 3: Improving Trust in a Fragmented Mortgage Ecosystem – 

Sprinter Observations on Challenges and Potential Solution Features

Sprinter observations on current challenges Sprinter observations on desirable solution features

Mortgage lenders and other ecosystem 

stakeholders may face regulatory, internal, and 

investor expectations for verifying the 

authenticity and accuracy of mortgage data, even 

when that data was previously verified earlier in 

the loan lifecycle.

Given this challenge, some mortgage ecosystem 

stakeholders place greater trust in decentralized 

data sources and paper documents over digitized 

mortgage data. 

• Establishing centralized, trusted sources of

validated mortgage data that are accessible by

mortgage ecosystem participants, thereby

minimizing the need for data revalidation

through the loan lifecycle.

• Given the fragmentation in the mortgage

ecosystem, government collaboration in

establishing a centralized, trusted source of

validated mortgage data.

• Tools that aggregate and verify a prospective

homebuyer’s financial information from direct

sources to assess their creditworthiness and

mortgage readiness. While such tools currently

exist, stakeholders expressed a need for

solutions that more frequently identify or verify

a true match of a homebuyer’s income, assets,

and employment.

The repeated due diligence of the same mortgage 

data throughout the loan lifecycle contributes to 

the complexity and cost of the mortgage process. 

The mortgage ecosystem is fragmented, 

preventing stakeholders from referencing a 

common source of trusted mortgage data. 

C. Theme 3: Optimizing Mortgage Technology Solutions to Further

Adoption

Due to the intricacies involved in mortgage origination and the extensive data exchange, 

mortgage lenders heavily rely on complex lending systems. These systems are specifically 

designed to navigate the diverse underwriting requirements for both conventional and 
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FHFA’s Velocity TechSprint: An Analysis of Key Themes

government-backed loans, ensuring optimal execution while adhering to various compliance 

requirements throughout the origination process. While some mortgage lenders have adopted 

modern systems equipped with web services and application programming interfaces (APIs) for 

efficient data exchange, others still operate with legacy systems that pose operational challenges 

when integrating with both internal and third-party applications and may rely on manual 

processes in aspects of loan origination. 

Sprinters observed that mortgage lenders grapple with an abundance of specialized third-party 

technology solutions at each stage of the origination process. They face difficulties in 

quantifying the actual return on investment associated with new technology, especially given that 

a lender’s capacity to invest in technology may fluctuate with the mortgage market cycle. The 

challenge of technology spending may be particularly acute for large mortgage lenders who 

generally face a higher total technology expense per loan.

17

Sprinters noted the value of technology solutions designed to both streamline mortgage data 

processing across different origination phases and successfully verify homebuyer data from 

direct sources. They believe such solutions could lead to increased adoption by lenders. This 

could benefit lenders lacking well-defined technology strategies to effectively integrate multiple 

third-party solutions throughout the origination process. 

Figure 4: Optimizing Mortgage Technology Solutions to Further Adoption – 

Sprinter Observations on Challenges and Potential Solution Features

Sprinter observations on current challenges Sprinter observations on desirable solution features

Some mortgage lenders rely on complex, legacy 

loan origination systems that pose operational 

challenges when integrating with both internal 

and third-party applications, often resulting in the 

use of manual processes in origination.

• Establishing centralized, trusted sources of

validated mortgage data that are accessible by

mortgage ecosystem participants, thereby

minimizing the need for specialized technology

17 Tom Finnegan, STRATMOR Group, The Large Bank Mortgage Banking Profitability Conundrum (June 2019).
15 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

Sprinter observations on current challenges Sprinter observations on desirable solution features

Lending systems often include workflows that are 

tailored to the underwriting requirements of the 

Enterprises and government-backed loans to 

meet compliance requirements at each stage of 

the process and to support best execution. 

Changes to these systems may be complicated to 

implement.

services and data revalidations (whether that be 

manual or automated revalidations) at each 

stage of the mortgage process. 

• Solutions that are capable of streamlining

mortgage data processing across various

origination phases, minimizing a lender’s need to

adopt multiple, specialized third-party solutions.

• Solutions that increase a lender’s operational

capacity and which may feature integrations

with lender point-of-sale and loan origination

systems and provide for portfolio-level rather

transaction-level search capabilities.

There is an abundance of specialized technology 

vendors supporting each phase of the mortgage 

process including pricing, closing, and document 

management. Lenders may be required to piece 

together the outputs at each stage to move a 

homebuyer’s loan forward, which results in 

complexity and cost. 

There is an abundance of third-party, automated 

verification services for homebuyer income, 

assets, and employment. Lenders are challenged 

with identifying the most cost-effective service

that can provide desired outcomes. Lenders face 

a technology cost, even when the service does 

not generate hits or matches for a homebuyer

during the origination process. 

D. Theme 4: Building Trust in Digital Solutions

Origination staff, including loan officers, third-party origination (TPO) brokers, and 

underwriters, play a pivotal role in driving the adoption of digital solutions and other 

technologies aimed at reducing costs and simplifying the mortgage process within the industry. 

Sprinters observed that, for various reasons, many origination staff members may still consider 

paper-based documents as the primary means of gathering homebuyer financial information. 

This preference for paper documentation persists because of the due diligence expectations on 

mortgage lenders and the lack of data trust in the mortgage ecosystem, making paper-based
16 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

documents the “source of truth” for verifying the authenticity and accuracy of homebuyer data. 

Additionally, because lending systems used by lenders often feature tailored workflows designed 

to accommodate the distinct underwriting requirements of conventional and government-backed

loans, obtaining paper documentation at the outset may simplify the lender’s engagement with a 

homebuyer through the remainder of the loan origination process. Finally, as many digital 

solutions rely on homebuyers sharing their online banking credentials, some homebuyers may 

distrust the security of digital solutions and prefer to engage in a paper-based process. 

These insights from Sprinters emphasize the ongoing necessity to bolster trust among 

homebuyers and origination staff in a digital mortgage process. These insights also underscore 

the pervasive issue of data trust as a significant pain point within the mortgage ecosystem. 

Figure 5: Building Trust in Digital Solutions – 

Sprinter Observations on Challenges and Potential Solution Features

Sprinter observations on current challenges Sprinter observations on desirable solution features

While lenders may have invested in third-party 

services and other technology solutions to 

automate the verification of mortgage data, many

origination staff members (such as loan officers, 

TPO brokers, and underwriters) may still prefer a 

paper-based process and forego the use of these 

solutions.

• Automated verification solutions that deliver a

greater frequency of success when verifying

homebuyer income, assets, and employment

from direct sources, minimizing the likelihood

that lenders will need to go back to a

homebuyer for financial documentation.

• Automated verification solutions that provide a

secure means of, with the homebuyer’s 

permission, accessing a homebuyer’s financial 

information from direct sources, thereby 

enhancing homebuyer trust in a digital 

mortgage process and a lender’s interaction 

with a homebuyer. This was identified by 

Sprinters as a potential use case for API tokenbased authentication or for the use of DLT.

• Solutions that increase a lender’s operational 

capacity and which may feature integrations 

with lender point-of-sale and loan origination 

systems and provide for portfolio-level rather

than transaction-level search capabilities. 

Origination staff may prefer to ask a homebuyer

for paper or PDF copies of their financial 

information in an effort to simplify their

engagement with the homebuyer throughout the 

origination process. During the origination 

process, new information uncovered about a 

homebuyer’s financial situation may affect the 

best loan option for the homebuyer which, in 

turn, may affect the information required from 

the homebuyer.

Automated verification services often rely on 

prospective homebuyers sharing their online 

banking credentials. Some homebuyers may 

distrust the security of these services and prefer 

to engage in a paper-based process.
17 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

Sprinter observations on current challenges Sprinter observations on desirable solution features

Mortgage lenders and other stakeholders may 

face regulatory, internal, and investor 

expectations for verifying the authenticity and 

accuracy of mortgage data, even when that data 

was previously verified earlier in the loan 

lifecycle. Given this challenge, some mortgage 

ecosystem stakeholders place greater trust in 

paper documents over digitized mortgage data. 

(See page 16 for associated observations)

E. Theme 5: Unlocking Affordable Supply for Underserved and FirstTime Homebuyers

The United States is contending with a shortage of affordable housing supply, which has been 

influenced by a combination of factors, including rising demand, increasing costs, and shifting 

demographic trends. Following the Financial Crisis of 2008, housing construction has not met 

the growing demand, especially in the face of demographic shifts that have increased the number 

of consumers seeking homes.18 These trends have led to a supply-demand imbalance, with robust 

demand driving up housing prices and exacerbating affordability issues.19 The COVID-19 

pandemic further complicated this situation, as low interest rates—while initially boosting home 

buying and refinancing activities—ultimately contributed to a significant rise in home prices, 

outpacing income growth.20 While the affordability challenges are pronounced in high-cost 

18 Kevin Kliesen, Federal Reserve Bank of St. Louis, Peaks in Housing Construction as a Recession Signal 

(September 2022) and Robert Dietz, National Association of Homebuilders, A Decade of Home Building: The Long 

Recovery of the 2010s (January 2020). 19 See Federal Reserve Bank of Atlanta, Low Interest Rates, Inventories Affect Housing Affordability (March 2021)

and Federal Reserve Bank of Atlanta, Home Ownership Affordability Declines by Record Levels (July 2022). 20 Katherine Schaeffer, Pew Research Center, Key Facts About Housing Affordability in the U.S. (March 2022).
18 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

metropolitan areas, the shortage of affordable housing supply is a nationwide issue, affecting 

even regions that were historically considered more affordable.21

Estimates indicate that the country needs an additional four to five million homes to meet the 

current demands of the housing market.22 Of particular concern is the shortage of affordable 

homes tailored to lower- and middle-income buyers, which exacerbates the difficulties faced by 

underserved and first-time homebuyers in finding suitable properties. Considering this shortage 

of affordable housing, some Sprinters concentrated their efforts on optimizing the utilization of 

existing housing stock that remains underutilized due to inadequate investment or disrepair. 

Research indicates that there are over nine million homes in the United States requiring 

investment to address deficiencies or connect to essential utilities. 23

Sprinters recognized the necessity for tools capable of unlocking these underutilized yet

affordable homes for underserved and first-time homebuyers. Their proposals involved offering 

these buyers a first opportunity to purchase such homes (including REO properties) before other 

investors and providing these buyers a centralized platform equipped with educational resources 

to assist them in identifying and renovating suitable properties. 

Figure 6: Unlocking Affordable Supply for Underserved and First-Time Homebuyers – 

Sprinter Observations on Challenges and Potential Solution Features

Sprinter observations on current challenges Sprinter observations on desirable solution features

Affordable homes are in short supply for 

homebuyers, particularly underserved and firsttime buyers. However, many prospective 

homebuyers may not be fully informed about or 

capitalize on the chance to acquire underutilized

yet affordable homes that require investment or 

renovation.

• Program enhancements and tools that offer

underserved and first-time homebuyers an

initial chance to buy affordable homes in need

of investment or renovation before making

them available to other investors, such as

institutional investors, after a certain period.

21 See Federal Reserve Bank of Atlanta, Low Interest Rates, Inventories Affect Housing Affordability (March 2021), 

Federal Reserve Bank of Atlanta, Home Ownership Affordability Declines by Record Levels (July 2022), and 

Katherine Schaeffer, Pew Research Center, Key Facts About Housing Affordability in the U.S. (March 2022). 22 Congressional Research Service, The U.S. Housing Underbuilding Gap (July 2023). 23 Joint Center for Housing Studies of Harvard University, The State of Housing 2023 (June 2023). 
19 

FHFA’s Velocity TechSprint: An Analysis of Key Themes

Sprinter observations on current challenges Sprinter observations on desirable solution features

Prospective homebuyers might not have the 

necessary educational resources or connections 

with potential contractors to efficiently assess 

home renovation costs, leading to lost 

opportunities for affordable home purchases. 

• Tools that provide prospective homebuyers

with supporting educational resources and

connections with potential contractor resources

to efficiently assess the cost and better utilize

homes in need of renovation.

Prospective homebuyers could gain an advantage 

by having an initial opportunity to explore REO 

properties, which are often more affordable.

4. Next Steps

The Velocity TechSprint has offered valuable insights into the challenges and opportunities 

associated with enhancing the adoption of data digitization and technology in mortgage 

originations. In presenting this thematic summary, FHFA’s primary aim is to offer readers an 

understanding of the insights that were uncovered through the TechSprint, including stakeholder 

feedback on the key avenues through which technology and data can be harnessed to enhance 

mortgage origination processes. Ultimately, the Agency’s goal is to provide a foundation for a 

future mortgage ecosystem that is not only more efficient but also marked by enhanced 

transparency and accessibility.

FHFA is committed to sustaining its engagement with mortgage ecosystem stakeholders on 

responsible innovation, and this commitment extends beyond the publication of this thematic 

summary. FHFA will continue its engagement with stakeholders through external outreach and 

active participation in industry forums to refine our understanding of these TechSprint themes 

and explore potential pathways toward addressing them. Through this ongoing dialogue and 

collaboration, FHFA aims to identify concrete ways in which the Agency can contribute to 

addressing the challenges and opportunities outlined in the TechSprint, ultimately fostering

positive change in the mortgage ecosystem. 

Please visit FHFA’s Financial Technology web page or contact us at fintech@fhfa.gov for more 

information about the Velocity TechSprint and other activities undertaken by FHFA to advance 

responsible innovation in the mortgage ecosystem.