MI Underwriting tool pulls documents and data directly from lenders, allowing mortgage insurers to make instant policy decisions at half the cost.

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Staircase, a platform that helps mortgage lenders integrate technology from multiple providers, has launched a new tool that it says allows private mortgage insurers to automate underwriting, slashing costs in half.

Staircase’s new tool, MI Underwriting, pulls documents and data directly from lenders, allowing mortgage insurers to make instant policy decisions at a cost of about $50 per loan file, half the current industry average, the company says.

Adam Kalamchi

MI Underwriting “delivers instant mortgage insurance decisions that can help insurers grow market share while allowing their lending partners to increase closing rates,” Staircase co-founder and CEO Adam Kalamchi said in a statement. “It’s a total game changer for the MI industry.”

Founded in 2020 by Kalamchi and Soofi Safavi, Staircase announced an $18 million Series A funding round in December, led by Bessemer Ventures, bringing the total raised to date to $24 million, TechCrunch reported.

In January, Philadelphia-based Staircase announced the launch of its “low-code marketplace,” allowing lenders to quickly build applications that automate mortgage processes. The company says its application programming interface (API) marketplace allows lenders to “dramatically accelerate the adoption of technologies by eliminating the complexities involved with integrations, data model mapping and security.”

In August, for example, Staircase announced a new API allowing lenders to embed automated underwriting technology used by Fannie Mae and Freddie Mac into any application and synchronize it to their point of sale (POS) and loan origination systems (LOS). Staircase’s same-day integrations enable lenders to move loan decisioning further upstream in the origination process, the company said, paying a fee of $1 per API call.

“For startups, the new API cuts out a 6- to 12-month [automated underwriting system] application process and gives them instant automated underwriting capabilities without spending time and money on IT and procurement reviews,” the company said at the time.

The new MI Underwriting tool will be a boon for lenders that don’t want to expend the effort or take the risk involved in underwriting mortgage insurance themselves, Staircase says. Fannie and Freddie typically require private mortgage insurance to cover lender losses if homebuyers are putting less than 20 percent down.

Private mortgage insurers can delegate underwriting to approved lenders, who represent and warrant that the information they use to underwrite the loan is truthful, accurate and meets the mortgage insurer’s guidelines.

But if lenders don’t want to take on the additional burden of performing underwriting of mortgage insurance — or risk that the insurance will be rescinded if problems with the underwriting turn up later on — they can choose to have the mortgage insurer perform “non-delegated” underwriting.

“If there’s more risk in the market, lenders often prefer the second set of eyes offered by non-delegated underwriting,” Kalamchi said in a statement. “Staircase MI Underwriting enables insurers to now provide this option quickly and cost-effectively. It’s a win for both private mortgage insurers and lenders.”

In May, technology provider Polly announced an update to its mortgage product and pricing engine, allowing it to retrieve quotes from the nation’s six-biggest private mortgage insurers, helping borrowers assess their options and streamlining the mortgage insurance process for lenders.

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Email Matt Carter

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