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By Nikki Washington
Have you heard the one about the mortgage broker who fabricated
verification of income and verification of employment documents that
resulted in millions of dollars worth of questionable mortgage loans?
He’s going to jail.
And the mortgage industry suffers another black eye to its credibility
with consumers who already complain about what they perceive to be a
slow and obscure process.
But a rogue mortgage broker isn’t the only bad actor that
can harm the industry. Potential borrowers providing their own
fake documents may be an even greater threat. Today, consumers can
buy just about anything on the internet—including fraudulent
income documents. A quick search online for “fake paycheck”
returns pages of results for made-up paystubs and W-2s–for free.
Borrowers can also easily forge these documents themselves. In
fact, we’ve seen reports that as many as 1-in-5 loan applications
contain inflated income information.
It has been standard practice for years for mortgage lenders
to ask for pay stubs to verify an applicant’s income and
employment. But the use of fake employers has become so common
that Fannie Mae created a
list of nonexistent companies it found listed on loan
applications. The fraud alert was published to warn mortgage lenders
about sham employers and identified red flags for which lenders should
watch to spot them–because it’s not always easy. Several of these
“businesses” are even listed on yellowpages.com and have other online
presences. They may also have working phone numbers and automated call centers.
As the prevalence of fake employers and financial documents
has grown, so has the need for a comprehensive, trusted means of
income and employment verification. Enter GSE-approved verification
solutions utilizing data from The Work Number® from Equifax.
Available for use by credentialed verifiers with a
permissible purpose under the FCRA, The Work Number database is the
leading commercial repository of employer-contributed payroll data.
It contains millions of payroll records contributed by 2.8 million
small, medium and large employer contributors. And, the data is
sourced from employers and updated each pay cycle.
Savvy mortgage brokers and lenders can stay in control of
the origination process by using this data to make better informed
decisions about potential borrowers’ ability to repay a loan. The
suite of solutions from The Work Number, designed especially for the
verification needs in each step of the origination process, gives
brokers and lenders the power to choose the verification data they
need, when they need it. And they get that information instantly. What
could be easier?
For more information on mortgage verification solutions from
Equifax, visit www.theworknumber.com/verifiers/industries/mortgage/.