Rapid Reporting: Income Verification In Loan Mods Reduces Foreclosures

Loan servicers are now incorporating more borrower verifications, such as validating income and employment, into the evaluation process when considering borrowers for loan modifications, according to Rapid Reporting, a provider of income- and identity-verification products to the mortgage industry.

Until recently, loan servicers had largely relied on information compiled in loan origination when evaluating borrowers for loan modifications. Verifying income and employment reflects the servicing industry's move toward more thorough underwriting standards as the industry struggles to correct itself amidst the current foreclosure crisis.Â

‘According to the Federal Bureau of Investigation, there is a strong correlation between mortgage fraud and loans that result in default or foreclosure, so it only makes sense to verify borrower information on loans in delinquency to insure that the modified terms fit the borrower's capacity to repay the loan,’ notes Jay Meadows, chief executive officer of Rapid Reporting.

‘Without verifying the borrower's income, loan servicers can never be certain that the payment terms of the loan modification are realistic,’ adds Meadows. ‘By securing definitive answers, loan servicers gain the confidence that the loan modification is a viable solution, rather than a futile attempt that will bring out a bigger problem later down the road.’

SOURCE: Rapid Reporting


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