Premier Member Editorial: Instant Income, Employment Verification Help Lenders Do More with Less
Chris Mock is vice president of mortgage verification services at Equifax Workforce Solutions
Shifting consumer expectations and soft demand have significantly impacted the mortgage market, creating mounting pressure for lenders to do more with less.
At this inflection point, mortgage professionals are seeking ways to streamline operations and manage workforce efficiencies, while contending with borrower expectations for speed and convenience.
One way to address this challenge is through instant access to verifications of income and employment (VOIE). Whether responding to the uptick in HELOC applications or preparing for a possible refinance surge amid potential interest rate drops, instant VOIE enables lenders to keep pace with consumer demand without sacrificing speed or accuracy.
More data means more insights
High-quality data that’s applicable throughout the mortgage process has become a differentiator for lenders. Among other benefits, using reliable data enables lenders to better predict creditworthiness, detect inconsistencies and speed up processing times.
As uncertainty continues to affect the industry, data is a vital tool to manage risk, improve decision quality and anticipate market shifts. As a result, lenders are seeking out solutions that enable them to act quickly while maximizing resources and maintaining accuracy.
Comprehensive income and employment data provide lenders with timely insights. A clear view into a borrower’s employment history or income trends helps lenders flag potential risk early and take proactive steps to safeguard loan quality.
Slow, manual processes cost time and money
Even with industry shifts to embrace automation and technology in recent years, numerous opportunities remain to enhance speed and consistency in the mortgage application process. Today’s borrowers expect a swift, hassle-free experience without unnecessary delays. Failing to meet these expectations could cause lenders to lose out on potential loans in a landscape where the competition for each customer can be fierce.
In today’s environment where many mortgage lenders are strapped for resources, tedious manual tasks create bottlenecks for already stretched teams. Traditional methods of determining loan affordability can be time-consuming and frustrating for both lenders and borrowers.
This is especially true when borrowers are required to print and provide physical copies of paperwork like W-2s and pay stubs. Lenders that primarily rely on consumer-provided documents risk inaccuracies that can negatively impact their portfolios.
Many lenders are alleviating the strain by leveraging technology to access reliable income and employment verifications instantly and securely.
Leveraging automated VOIE throughout the mortgage process
Despite the industry’s push to streamline the mortgage process, the value and cost-effectiveness of leveraging instant verification early in the cycle is often overlooked. As a result, many lenders wait until later in the process to pull income and employment verification.
Adding additional information from automated VOIE like an indicator of employment status alongside the credit pull at the pre-approval or pre-qualification stages gives lenders an early measure of whether essential verification details are available—without requiring borrowers to submit additional information. This strategy can help lenders manage verification expenses and better predict cost to close.
Integrating automated VOIE into lending processes also reduces the risk associated with outdated or potentially inaccurate information common in manual processes. Built-in decisioning criteria and loans seamlessly backed by data can reduce errors, costs and labor. Replacing paper-based VOIE reviews with data-backed automation can help lenders grow their portfolios with greater confidence and more effectively manage risk.
The bottom line
Outdated, manual workflows are no longer sufficient in today’s lending environment. Lenders that rely on narrow data sets and legacy processes risk turning away qualified applicants simply because their broader financial picture isn’t considered.
Lenders that adopt automated VOIE early in the application process gain the advantage of speed, accuracy and deeper insight. This ultimately empowers them to approve more qualified borrowers quickly and manage risk more responsibly.
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
