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# System prepended metadata

title: Digital Loan Application

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# Digital Loan Application

Q is extremely easy for borrowers to use, requiring no paper documentation or human interface in order to get a mortgage.

To create an account and start a loan application, borrowers must provide:

- A current mobile phone number
- A scan of their government issued ID
- A video selfie

With this information alone, Q is able to verify the borrower’s identity and perform KYC.

:::success
[Learn more about KYC → ](https://hackmd.io/@Ij1CQVxEQkKOeJiKlshRLA/SJx6xrXvd)
:::

**Borrower financials are collected via digital links, instead of documents.** Q supports digital logins with:

- Banks and credit unions
- Brokerages
- Internal Revenue Service (IRS)
- Homeowner’s insurance provider

With the data from these links, Q can analyze the borrower’s ability to afford the mortgage. **Income and assets** are calculated from account balances and activity. Q connects with payroll providers and the IRS as another confirmation for income and employment.

To assess the borrower’s **credit history**, Q pulls credit reports from all 3 reporting bureaus. By parsing these, Q can understand the borrower’s current liabilities, including any mortgages, and their history of debt repayment.

Finally, Q verifies that their home is properly insured. Q collects proof of insurance directly from their **homeowner’s insurance** provider rather than relying on documents provided by the borrower.

Learn more about Financial Verification → 

The **borrower’s property** is the other major component to the loan application. Given just an address, Q performs an analysis of the property to confirm its eligibility for a mortgage:

- Legal status and title history
- Current ownership
- HOAs and condo association info
- Sales history
- Identifying comparable sales

Using data from public and private sources, Q calculates an **automated valuation** within seconds. For many properties, this is sufficient to complete the mortgage. To confirm this, an **appraisal waiver** is automatically requested from the GSEs.

If the GSEs require an appraisal, or it’s a jumbo mortgage, Q performs a **virtual appraisal**. This only takes the borrower a few minutes using their mobile device and is completed by a licensed appraiser.

Learn more about Property Valuation → 

Since Q relies on automated verification and data collection, **not all borrowers and homes will be supported** at launch. To provide the best experience, Q passes those customers to Flagstar’s retail mortgage team to complete the process. All progress they’ve made on their application is saved and transferred over.

Learn more about Application Fallback → 

Finally, borrowers can select from one of 3 loan types:

- 30 year fixed
- Adjustable rate
- Merge: fixed rate matching term and outstanding balance for an existing mortgage

Once their application is complete, borrowers receive their offered terms from the lender and are clear to close. Underwriting, closing, and delivery occurs through Q's *Mortgage Smart Contracts*.

Learn more about Mortgage Smart Contracts → 

# Mortgage Smart Contracts

Q uses **mortgage** **smart contracts** to execute mortgage loans. By using code-based smart contracts, Q can process a loan application into a closed loan in just a few minutes. 

The smart contracts are configured by lenders. The simplest configuration requires just a couple lines of code and defines the lender's **underwriting** and loan **pricing** terms. Underwriting and pricing rules can be created using any loan application field or derived value as input. 

Learn more about Lender configuration → 

The smart contract's code automatically checks the borrower's loan application against the rules, generating an approval or rejection reason. Approved loans are instantly priced using the lender's specifications, with the quote immediately available to the borrower within the Q mobile app.

Learn more about How mortgage smart contracts work → (rules and actions, pseudocode?)

closing

settlement & delivery

scaling

qdb
