Save Time and Money with a Third-Party Verification Partner

Technological advances have opened the floodgates of opportunity for lenders in the digital world. These advances provide lenders the potential to decrease costs and shorten loan decision cycles with the use of a third-party verification partner. 

Few parts of the loan origination process are as untimely or as unwieldy as income and employment verification. Lenders have traditionally verified income and employment by contacting the applicant’s employer or asking applicants directly to provide pay stubs, W-2s, or, more recently, their banking credentials. When lenders have to stop and make a phone call to an employer for verification, or worse, ask the customer to leave and return with documentation, it creates friction for both the borrower and the lender. Lenders can cut through these complexities with the right digital and instant third-party verification partner. 

Reduce risk and friction in the loan process

Using third-party data providers to verify income and employment can help ensure lenders have current data, enabling them to approve a qualified home buyer faster and with more confidence. Digital income and employment verifications also can help reduce the potential for human error and lower risk to the lender. 

In addition to helping shorten the loan cycle, automated employment and income verification from third-party data providers can help reduce processing costs by increasing efficiency at every step- potentially helping them to close more loans can be closed faster. Data provided directly by employers and payroll providers can also increase certainty throughout the loan decisioning process and help reduce the risk of future defaults resulting from over-inflated borrower-provided income.

Relying solely on applicant-provided documentation can take more time and be less accurate

The added costs, delays and burdens caused by paper-based processes may put some lenders (and the originators who work with them) at a disadvantage when it comes to achieving growth and efficiency objectives. Loan applications can be rife with incorrect information. This includes overestimates (and even underestimates) of income as well as other inaccuracies that impede processes and jeopardize approvals.

The more that a lender relies on applicant-provided documentation, the more they open themselves up to this uncertainty. While this analog process is sometimes necessary, relying solely on it is outdated in the current digital age. The exponentially more reliable and faster way to verify income and employment is through third-party verifications, using data provided directly from employers and payroll providers, as long as the lender has a permissible purpose. 

Technology solutions can give lenders a leg up

Driven in part by an increased need to manage costs, lenders are looking toward technology as one solution to prepare themselves for future competition. The goal of this approach is to fully digitize what was once an entirely analog, paper-based process. Although technology solutions can have significant upfront costs, a completely digital loan origination process would drive down time spent on loan applications while helping to improve efficiency across all departments. This efficiency can translate to increased borrower satisfaction and, ultimately, more loans funded.

Save time and money on each loan

Ultimately, digital income and employment verifications enable lenders to make fast, informed decisions by letting them instantly see the most up-to-date information that can potentially save them money on each loan. They can also gain a broader understanding of the borrower’s financial history, including insight beyond the stated income or credit score. In turn, lenders and originators can provide the immediacy and convenience consumers have come to expect.