As a financial services professional, there’s one word that goes along with almost everything you do. You’ve guessed it—compliance. And, while there are a number of mortgage lending products and services out in the industry to help your financial institution increase loan volume, close loans more efficiently, and assist with reducing costs, compliance should always be top of mind. Remaining complaint is a MUST throughout the life of a loan; that means from origination to servicing and all the in between.
This may sound like a lot to take in, but there are a few must-have verification services that can make this process seamless for your institution. Check out our list below.
1. Income Tax Verification
Verification of income tax through 4506-T Processing will assist in determining a consumer’s ability to repay, mitigating your institution's risk, and complying with industry regulations. This service, which was once a manual process, can now be conducted electronically with tax transcripts being delivered faster directly from the Internal Revenue Service (IRS) assuring that it is accurate.
2. Social Security Number (SSN) Verification
According to the Federal Trade Commission, identity theft continues to be the top consumer crime in the United States. And, since this growing crime can significantly affect financial institutions, it’s necessary to be cautious and take the appropriate measures to remain compliant. Think of SSN verification as a lender's safety net, making borrower authentication possible. While you can’t completely eliminate fraud and identity theft, this service can certainly assist with decreasing the number of cases that originate from your mortgage lending program.
Related reading: How to Find Those "Red Flags" of Identity Theft
3. Employment Verification
Verifying things like income history, bonuses, commissions, overtime, and even the probability of your borrower’s continued employment is something has always been required and in today’s compliance-driven world it’s a necessity that can’t be overlooked. Like other verification processes, employment verification assists with mitigating risk and ensures that you are compliant with industry regulations. There are also many options in the industry to make this manual process more efficient.
4. Verification of Deposits
For some financial institutions, the words verification and time consuming go hand in hand. However, that doesn’t need to be the case. In today’s technology-driven world, it’s now possible to verify things like electronic bank statements from all types of accounts instantly. Having information like this at your fingertips allows you to determine the debt-to-income ratio for your borrowers and ensure their validity when it comes to loan applications.
There’s no doubt that compliance and security standards will continue to become more stringent. So, what does that mean for financial institutions? It means staying abreast of changing regulations and guidelines, while taking proper precautions to ensure that your mortgage lending program stays compliant. Verification services allow financial institutions to feel more confident when it comes to borrowers and their ability to repay. By applying the necessary due diligence to assess a consumer’s ability to pay and pinpoint fraudulent activity, you’re mitigating the risk that your financial institution is exposed to. All, while doing so in compliant fashion.