Mortgage technology startup Novaprime is making its public debut with the launch of an AI-powered loan platform that it claims allows lenders to sell loans to investors in just days, instead of weeks, all with a high degree of accuracy.
The platform evaluates the loan purchase eligibility and data quality while also handling document management to help lenders operate effectively and efficiently, said Linus Petrén, Novaprime’s CEO. Loan details needing attention are routed to a professional for a better borrower experience.
Miami-based Novaprime utilizes smart contracts that conform to MISMO standards and extract all the loan data and compare it to source data of documents as well as agency eligibility, all in real time.
“There’s a human in the loop workflow, so they can discover any issues in real time, with the intent that when they get to closing and right after closing, they already have the high confidence that one, that loan is sellable, the quality is there, there’s nothing left to check, let’s move on and get it committed,” Petrén said in an interview. “Once it’s committed, we help them create the delivery files as well so they can go and deliver the loan.”
Lenders benefit from lower downstream risks and reduced reliance on manual work, resulting in savings and increased productivity, Novaprime said. For investors, Novaprime ensures that loans are processed with high accuracy and efficiency, enabling faster post-purchase handling.
Novaprime is starting with post-close quality control functions and working backwards. Eventually the lender clients will get more comfortable with the product and use it earlier in the loan cycle, Petrén said, which should bring even greater cost savings.
Petrén said there is no warranty on buybacks/reps & warranties issues at this time on the platform, though he said they’re doing about 5,000 to 6,000 loans a month with a large homebuilder-affiliated lending partner and see millions of data points in real time.
Novaprime’s product, dubbed “Loan Quality Platform,” would work for any lender who wishes to sell loans to investors more quickly, Petrén said. Loans sitting on the books cost a lender between $500 and $1,500 per day. That adds up.
“We want to make sure is that we’re reducing costs as much as possible. And really, the way that we’re looking at it is we’re not trying to do sort of one part of the system a little bit better and then charge fees for it. We’re looking at it holistically…we’re looking at things like, how can we actually automate workflows, not just for the lender, but across different counterparties, and also when you think about capital markets and can your TBA hedging be partially automated as these loans are being verified and committed and delivered?”
Novaprime’s marketplace product is already integrated with Freddie Mac.
