Lenders have traditionally used manual verification to confirm the information provided on mortgage applications. Reviewing hard copies proved to be time-consuming and prone to error, creating a need for digital income and employment verification. This article explains the benefits of investing in advanced software to streamline income verification and other processes.
The Need for Advanced Mortgage Verification
Traditional verification methods are outdated, inefficient and subject to human error. A human reviewer can easily make typographical errors or other mistakes that compromise the accuracy of income verification and asset verification for mortgage applications.
Customers demand a streamlined approach designed to enhance speed and accuracy in the mortgage process. In September 2024, the number of mortgage applications submitted reached a two-year high, highlighting the need for advanced verification tools. Lenders must also comply with state and federal verification regulations, increasing demand for tech-driven solutions.
Although it’s possible to use employment verification software to speed up certain aspects of the verification process, the cost of archaic solutions has increased rapidly. Additionally, lenders often receive incomplete or outdated data, making the underwriting process more difficult.
Lenders who receive insufficient data still pay the same amount to use outdated solutions, increasing their costs without corresponding benefits. Even if the data is current and accurate, archaic solutions often rely on manual document collection, further disrupting the process and hurting the overall customer experience.
Key Features of Advanced Mortgage Verification Systems
Automation improves mortgage verification efficiency, speeding up the process without sacrificing accuracy. Instead of asking employees to review thousands of pages of data, you can rely on automated tools to perform verification tasks in a fraction of the time.
Advanced mortgage verification systems also feature real-time data integration, reducing delays and errors that could make your business less profitable. Eliminating delays also improves the customer experience, enhancing your company’s reputation in a highly competitive marketplace.
Best of all, advanced mortgage verification tools have security and privacy features designed to protect the integrity of user data. Verifying income and employment involves collecting Social Security numbers, employer names and other personal information. Advanced security and privacy features make it possible to comply with laws related to sensitive data protection.
Cost-Benefit Analysis: Upfront Investment vs. Long-Term Savings
If you’re responsible for verifying mortgage applications, it’s important to see advanced mortgage verification as an investment in your business. Implementing advanced tools has upfront costs, but a cost-benefit analysis shows the long-term benefits far outweigh your initial expenses.
Over time, reducing processing time leads to lower operational expenses, making it possible to preserve your profit margin. Improved verification of mortgage application data also reduces loan default risks, further enhancing your company’s bottom line.
The benefits of advanced verification also extend to borrowers, as efficient processes reduce the time to approve a home loan application. Instead of waiting for a decision, borrowers can get quickly approved.
Truv has helped several lenders cut expenses, manage risk and improve the borrower experience.
Revolution Mortgage
Revolution Mortgage came to us when operational costs increased due to the high cost of using legacy verification of income and employment (VOIE) providers. The company also faced increased borrower friction due to loan processing delays.
Based on Revolution’s goals, the lender launched Truv’s Verification of Income & Employment, Verification of Assets, and Integration with their Point-of-Sale (POS) to streamline the verification process upfront in the mortgage application, meeting borrowers’ expectations regarding speed, affordability, and ease.
After partnering with Truv, Revolution Mortgage reduced its verification costs from eight basis points per loan to three basis points per loan. The partnership allowed Revolution Mortgage to increase efficiency and raise the revenue earned per loan.
Compass Mortgage
Before partnering with Truv, Compass Mortgage had two problems:
- The extremely high cost of income verification and employment verification
- Poor data quality from archaic verification solutions
To solve these problems, the Truv team recommended the Verification of Income & Employment and LOS Integration service. Implementing advanced verification helped Compass Mortgage save 60-80% and maximize efficiency.
Justin Venhousen, COO of Compass Mortgage, says, “There’s no excuse for lenders to not look at a product like Truv. It works, it’s easy for the borrower, the data set is superior, you benefit from GSE approvals and the price is more competitive.”
Truv’s Customer-Permissioned Verification: A Game Changer in Mortgage Verification
Truv’s verification tools are a game changer for lenders. Each tool offers the following benefits:
- Real-time data: Truv employment verification uses customer-permissioned real-time data directly from payroll providers, ensuring accuracy and completeness.
- Fraud prevention: Truv offers real-time fraud detection to help lenders avoid losses associated with fake documents.
- Cost efficiency: Truv’s verification tools can help you save up to 80% compared to archaic solutions.
- Seamless integration: Truv uses pre-built integrations with LOS platforms to streamline implementation and eliminate loan delays.
- All-in-one platform: Truv is an all-in-one platform that allows you to verify income, employment and insurance data in one place.
Overall, customer-permissioned verification enhances cost efficiency and helps lenders minimize risk. Justin Venhousen states, “Truv’s POS and LOS integrations are customizable to fit into your workflow however you want, but Truv out-of-the-box also works really well,” highlighting the flexibility that comes from partnering with Truv.
