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December 19, 2016 Issue



Qualified Income Calculator Platform providing Complex Tax Return Analysis for Borrowers and Mortgage Lenders


Kirk Donaldson






Kirk Donaldson



Interview conducted by:

Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – December 19, 2016


CEOCFO: Mr. Donaldson, would you tell us about LoanBeam? 

Mr. Donaldson: LoanBeam is a qualified income calculation software company. Using patented algorithms along with digital and OCR technology LoanBeam processes

·         both simple and complex tax returns for self-employed borrowers,  

·         pay stubs, W2 and 1040 documents for wage earners

 in order to qualify borrowers for residential mortgage loans. 


CEOCFO: How does the technology work? How are you able to extract what is relevant and how do you decide what is relevant? 

Mr. Donaldson: LoanBeam started developing its patented technology more than fourteen years ago as part of a company named SurePrep which was founded and led by David Wyle, CEO. The goal of SurePrep was to create technology for the preparation and processing of tax returns. Over this time, we have honed the OCR algorithms related to calculations needed for tax prep so that we triangulate the data points and use these intelligent, patented algorithms to extract data from tax returns for LoanBeam qualified income output. Although LoanBeam is only five years old, the technology developed has been run on over a million tax returns. Our income calculations can be mapped to the requirements of either the GSE’s, Freddie Mac and Fannie Mae, or customized workbooks for individual lenders, which have varying standards on the level and type of qualified income a borrower needs to be eligible for different size and types of loan products. 


CEOCFO: What might you pick up in a return that other less sophisticated methods might not? 

Mr. Donaldson: A borrower may have a K1 - they may be a private investor. Their ownership on that K1 may be 25% or above, and that would trigger the need for a complete corporate tax return. There may be errors, omissions or internal inconsistencies on their tax returns. There may be missing Schedule C information on the tax return. There may be sun setting or declining income, let us say from a rental property. These are nuances of the tax return that can assist an underwriter, loan officer who in processing many loans could miss, may just be oversight or you may have where it is a key stroke error, considered just natural human error. What we have done using our algorithms, by triangulating those numbers, by doing this over and over again on millions of tax returns, is we are able to recognize these issues noted above and provide a more complete and accurate data submission. 


CEOCFO: Would you tell us about what you provide to the lender?

Mr. Donaldson: The benefit of LoanBeam is that we provide all of the above. We provide a baseline number, but then we also provide all the information behind that in a customizable report that can be used by the lender. We put together a workbook, which is customized per lender or maps to the GSE forms, and then we provide a summary page of any missing documentation right up front. We help eliminate the constant back and forth to the borrower, every day looking for a new piece of information, but all of the missing documents that you will need, a summary of that qualified income calculation, and then as you tab through that workbook, it will drill down into the detail of what type of income, where the income is being derived from and all of the detail behind that income. 


CEOCFO: How are you able to identify things that do not make sense? How can you deal with some of the nuances? 

Mr. Donaldson: One of what we see as the key benefit of LoanBeam is the most complex tax returns are usually linked to the largest or most valuable clients of a financial institution. The more complex the tax return, usually the more activity that particular client does with that institution. Being a valued client, what you do not want is the constant back and forth looking for missing documents, looking to just fill that up. Over the course of preparing tax returns, the way that OCR, the way that these algorithms, the way that our process gets better is time and volume. By processing over that amount of time, we have gotten our algorithms, our OCR, our identification, our digital reading to the point where we understand why numbers are where they are, or why they are missing, or that they are declining. With what I spoke about earlier, in that missing documents, that back and forth, if you can give me a clear set of documents that you need and why, day one, as a borrower it is a much better experience than getting a call every three days looking for something new. What you have done is you have told me that I should take out a loan with your institution because I am a very good client, and you turn that into a negative instead of a positive. What we are doing is turning that into a very positive experience by getting all that information upfront. Here is a clear picture of your income, right away and let us move on. 


CEOCFO: Is the trend for mortgage lenders to be more concerned about their customers? Or are people realizing that you want to have a happy customer - not just a customer? 

Mr. Donaldson: I think you have several factors working into this. One is the overall mortgage experience of the borrower, but then you have the perceptions of the general public about our industry as a whole. Since the mortgage crisis, a regulatory environment has been established, and rightfully so, to protect the general public and the secondary market from No Doc Mortgages. It would seem that those two will compete against each other: more regulation means more oversight, which means more paperwork, which means a longer, more arduous experience for the borrower to protect the individuals as a whole. What we are seeing now is a digital revolution in the mortgage industry, unprecedented in the automation and digitization of an industry. We saw this with financial institutions with the New York Stock Exchange, now you are seeing it in the mortgage industry. A borrower can provide institutions with financial information in almost real time. Through the automated paycheck services, by asset evaluation through the digitization of bank statements, brokerage statements, being able to apply tax information, - it very rarely happens - you are seeing a benefit to the regulatory environment where now we are getting very accurate, clear, concise information, but we are also getting it much faster in digital form, which is significantly shortening the time a borrow needs to wait for lenders to make decisions. That back and forth with the borrower makes it less onerous on the borrower, but also making it a more transparent, consistent experience for all parties involved. 


CEOCFO: What is involved when a company starts to use LoanBeam? 

Mr. Donaldson: What we do, and given the information that we handle, we have application programming interfaces or APIs and we are either a web based or an API integration. We assess the need and volume of a lender or institution and how their mortgages are processed. Companies like Ellie Mae, Black Knight or Equifax, where we are doing full integrations, we set up a secure portal or pipe with our APIs, and then on an individual lender basis we set up the relationships, where we integrate our systems and then a lender is able to establish an account for a borrower, upload the tax returns or income statements or pay stubs into our system, we then process, return and qualify the income calculation with a full workbook in a clear audited trail for them.


CEOCFO: Are most companies using some form of electronic service today? When might somebody turn to you? When do they realize there is a better way? 

Mr. Donaldson: Fortunately, and unfortunately for us, there is limited competition in the manner in which we performed qualified income calculation, and so informing lenders of who we are, what we do and how we do it is a full-time job. Like any other small company getting our name out there and recognition within the industry of this size is challenging, but we are embracing it at all levels. We are fortunate in that we have partnerships with some of the largest players in the industry, and because what we do has such an impact on cost savings, accuracy, compliance, transparency, our product sells itself and the value is almost immediate. We have an incredible sales staff and team for marketing that has helped us penetrate the mortgage market in an unprecedented way. 


CEOCFO: Would you tell us about your joint referral agreement with Equifax Verification Services? 

Mr. Donaldson: We recently signed a joint referral agreement and are working towards integration agreement in 2017. Equifax organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its databases include employee data contributed from more than 5,000 employers. We are excited, as any company would be, to have a relationship with a top company in any industry. They are one of many, but definitely seen as the gold standard in their space. We use some of the information that they can provide as income verification to confirm some of the calculation that we output. 


CEOCFO: What surprised you as LoanBeam has grown and evolved? 

Mr. Donaldson: Overall, the sheer size of the market, the numbers and volume in the U.S. mortgage market are just enormous. The speed in which we have been able to penetrate that market and grow each of the sections of what we have done - in any new product, you have an idea, you believe in that idea, but until that idea is validated by the acceptance outside your own firm, in this case, lenders telling us this is a fantastic product, that LoanBeam is something they want and need and that idea is accepted by them. You always have a question of would you be able to be a success in that market. I think out of everything, the pleasant surprise has been the overwhelming acceptance of what we are doing and that validation coming through in the form contracts and orders that we have received from our new partners. 


CEOCFO: Would you tell us the takeaway for our readers? 

Mr. Donaldson: We are seeing something fantastic going on in one of the largest industries in the country – a fintech digital revolution in the mortgage industry and LoanBeam is excited to be on the forefront. It is going to create efficiencies, cost savings, transparency to all aspects of the industry. It is going to benefit borrowers, regulators and lenders simultaneously, have cost savings as a consumer, as a company, and the technology is also helping with regulatory changes at the same time. Products such as ours bring speed to close while enhancing the borrower and underwriting experience.  In the coming months and years, you are going to see a much more transparent, efficient marketplace and we hope that LoanBeam can help borrowers and lenders streamline the mortgage application process. 



“We are seeing something fantastic going on in one of the largest industries in the country – a fintech digital revolution in the mortgage industry and LoanBeam is excited to be on the forefront.”- Kirk Donaldson





Kirk Donaldson








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