6 Questions to Ask Your Data Verification Provider
Scalability, multiple data sources, and customization should be the top priorities
The residential lending process is highly data-intensive, requiring verification of everything from employment to income to occupancy to appraisals to Social Security numbers and more. If the data is correct, the entire purchase or refinance goes relatively smooth. But if the data is incorrect, the stakes are high: fraud, non-performing loans, and increased risk for the lender and potential closing delays for the consumer.
Data quality is critical for lenders, but verifying data is typically a resource-intensive, inefficient process requiring costly manual intervention. Lenders have had some success automating parts of the data verification process, but most lenders still struggle with balancing speed and accuracy.
Lenders interested in streamlining the identity verification and fraud detection process should ask the following six questions of any vendor they are considering as a partner.
1. What data sources do you use?
Most data verification providers rely on a single database to authenticate data. But what if the database isn’t up-to-date or simply has incomplete information? Look for a data verification provider that compares borrower supplied data across multiple data sources to corroborate if the data is correct. Comparing results from different databases reduces the risk of missing and/or incomplete data and allows you to fine-tune.
But even if the provider is collecting data from diverse sources, you shouldn’t have to wade through all the results. A data verification provider should compile the results and report them in a single, easy-to-use platform or report, highlighting only variances that should be addressed.
2. What type of support and training do you provide?
In order to maximize the data verification provider’s tools, employees will need to learn how to use them effectively and efficiently. Make sure the provider offers ongoing support and training. Look for a variety of training options to fit your needs, including onsite and online training. The training should be customized to the type of lending you do and to your workflows.
3. Is the solution customized and scalable to my business?
Although there are many similarities between a residential origination loan and a refinance, there are also distinct differences that impact the type of data that is most useful. The data verification provider you select should offer a data solution that is specific to the type of lending your firm does, whether your business is residential, FHA, correspondent lending, or wholesale lending.
For example, perhaps you want to focus on verifying undisclosed debt. The provider should give you several options to gather that data based on your strategy and cost constraints.
The solution should not only be relevant to your business today, but the provider should allow you to update the data package as your business challenges or the lending market evolves.
4. Does the solution automate checklists?
The mortgage process relies on a variety of checklists that are integral to completing a loan. The data verification provider should offer checklist automation and also provide a one-page report that highlights and identifies items that need further scrutiny. The provider should make it easy to digest the data provided with streamlined reporting.
5. What types of integrations does your provider support?
It’s important that your provider have a robust integration with your LOS or POS provider to eliminate the need to switch between systems. Your provider should deliver data types and outputs such as customized reports, batch files, and HTML files that improve processes and reduce cycle times for critical systems.
6. Does the solution conform to Day 1 Certainty™ from Fannie Mae?
In order to take advantage of Day 1 Certainty™ from Fannie Mae for automated pre-verification that can improve lending process efficiency, lenders must work only with data verification suppliers that have completed Fannie Mae’s rigorous vendor assessment process. Look for a data verification provider that meets Fannie Mae’s requirements for technology, tools, security, and forms/reports.
Ensuring that your data verification partner can adequately answer these six questions will enable you to make better and more consistent lending decisions, increase borrower satisfaction, and streamline your lending process.
For More Information
To learn how DataVerify can streamline processes, improve efficiency, and improve customer satisfaction across the consumer and real estate lending spectrum, contact us at 866.895.3282 option 5 or
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