More Juice, Less Squeeze: Streamlining Self-Employed Income Analysis

Our recent “More Juice, Less Squeeze” campaign struck a chord on LinkedIn - clearly, we’re not the only ones tired of squeezing hours out of underwriting just to get a few drops of qualifying income from self-employed borrowers.

So, we wanted to go deeper.

The Challenge: Self-employed income analysis has always been complex. Borrowers submit stacks of personal and business tax returns, sometimes spanning hundreds of pages, with multiple entities, rental properties, and unique deductions.

This post breaks down the two biggest ways lenders can boost margins and cut the busywork: automating income analysis, and just as importantly, reordering the workflow so you qualify income before spending time and money on credit reports, appraisals, or full underwriting.

Let’s dig in.

Why Automation Matters

Manual processes drive up costs. Labor accounts for about two-thirds of loan production expenses, and origination costs have jumped nearly 35% in recent years¹. Freddie Mac reports that digital tools can save up to 12.4 hours of production time per loan, up to 40% when the process is fully digitized¹.

That’s where Baleen comes in.

Baleen automates income analysis by reading full tax documents, identifying add-backs, flagging missing files, and calculating qualifying income. The results export to SAM reports or Fannie Mae’s income calculator, where Fannie Mae offers relief from representations and warranties on the income calculation².

It’s like giving your team aa productivity boost without the extra headcount.

Rethinking Workflow: Income First, Everything Else Second

While automation reduces underwriting labor, reordering the loan workflow creates a second major cost-saving opportunity: qualify income before investing in credit pulls, appraisals, or deeper underwriting.

Many loans fall apart after those costly steps, often due to insufficient income. By front-loading income analysis with Baleen, lenders can screen applicants earlier and more effectively:

• Loan officers or assistants run tax returns through Baleen at intake and receive an income estimate in less than five minutes

• Missing forms and potential underwriting issues are flagged immediately

• Only income-qualified files move to expensive steps like pulling credit reports and underwriting

• Underwriters start with a consistent, complete income calculation instead of hours of manual transcription

This “screen first, underwrite second” approach prevents waste, reduces rework, and speeds up decisions. Freddie Mac found that automation can reduce loan cycle times by up to 8 days, saving about $190 per loan, and potentially $600 in borrower closing costs¹. As a simple example, if 20% of self-employed applicants are found to have adequate income, the lender can save 80% on credit reports by only ordering them for applicants with sufficient income.

Conclusion: The Future of Income Analysis

With Baleen, lenders request documents fewer times, approvals move faster, and borrowers get clarity sooner. Instead of weeks of back-and-forth, self-employed applicants get a quick, credible income estimate up front. That’s less hassle and more confidence.

“More Juice, Less Squeeze” is more than a slogan, it’s a strategy. Lenders can improve margins and efficiency by:

• Automating income analysis to reduce manual work

• Speeding up loan decisions

• Reducing origination costs and rework

• Improving borrower experience

  
  

Baleen makes this shift easy. It automates tax return analysis, supports early screening, and delivers clean, reliable income calculations upfront.

That’s how modern lenders get more juice with a whole lot less squeeze.

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¹ Freddie Mac. 2024 Cost to Originate Study.

² See the Fannie Mae Selling Guide for full details.