Information Transparency and Data Verification
Do Your Borrowers Know Their Data is Verified?
As the mortgage industry prepares for the “new” version of the Uniform Residential Loan Application (URLA), an important question arises – will the borrower be made more aware of the quality control verification process? Historically conducted on a ten percent random sample and loans that default, the recent Federal Housing Finance Agency (FHFA) announcement advises Fannie Mae and Freddie Mac to move the focus of QC reviews to an earlier point in the process. Conducting post-closing and pre-funding reviews within 30 to 120 days of loan purchase is the suggested FHFA model. Although the focus of the new URLA is on data, which brings significant lift to the verification process, there will obviously be some gaps in data availability for certain employment, income and asset scenarios. This predicament is similar to the inconsistencies in electronic property data that occurs in more rural geographic locations. These circumstances will force lenders and other loan participants to collect information the “old-fashioned” way, by mailing to and/or calling small employers, businesses and/or community banks to verify corresponding application information