The Mortgage Minute--Facts, Figures and Forecasts: If ‘Ifs' and ‘Buts' Were Candy and Nuts ...
Keeping the Workplace Safe With Background ChecksNick Fishmanbackgorund checks, pre-employment screening, unethical business practices, High-Risk Home Loan Act
The practice of conducting effective pre-employment screening
for prospective employees has exploded in the workforce over the
last 10 years. The need to hire the most qualified candidates has
never been greater, nor has the inherent risk in hiring the wrong
applicant. Employers owe it to themselves and their customers to
know everything they can about their employees, and the most
effective method to accomplish this is a background check.
Workplace crime and unethical business practices are on the
rise. The cost of internal employee theft is bleeding both large
and small businesses, and has become a multi-billion dollar drain
to our economy. Negative publicity, especially as the result of a
less-than-thorough background check, can devastate the very
foundation of a trusted company.
And it is no different within the mortgage lending industry.
Like every industry, there are opportunities for criminal,
fraudulent and unethical behavior within the labor pool. We have
all heard stories about workplace violence and theft, and there are
more reports of predatory lending practices and fraudulent lending
schemes than ever before. An effective background check can limit
the opportunity for these instances. By addressing an applicant's
past, an employer can determine if they are predisposed to engage
in these activities.
In Illinois, for example, not only is it good business to
conduct a background check, but it will soon become mandatory with
the implementation of the High-Risk Home Loan Act. This law
mandates that all loan originators must submit to a background
check in order to be certified as the employee of an approved
lender. Laws such as this are springing up across the country and
are designed to protect both business owners and consumers.
But what is an effective method of conducting a relevant check?
The term can refer to a wide array of services and practices, but
there are some basics that must be followed in order to obtain the
most accurate and concise information. To begin with, the best
method is to go directly to the county courthouse where the person
has resided for the past seven years. It is also acceptable and
recommended to check maiden and alias names in each county as well.
More expensive? Yes, but the alternative is a database search which
is comparable to searching for a needle in a haystack.
Contrary to popular belief, an applicant does not have to supply
you with all of this information in order to find it. Once an
applicant has agreed to submit to a check and provides their social
security number, a search can be done to determine all past and
present names and addresses. While the criminal check seems to be
the sexy component of a background check, there are other equally
important elements. In the case of a loan originator, an employer
might want to conduct a credit check as well, in order to verify
education, employment and/or professional licenses.
Remember: a resume tells an employer what an applicant wants
them to know. It is a sales tool designed to show all of the
applicant=s benefits and none of their shortcomings. Background
checks can verify this information and, more importantly, reveal
significant withheld information, such as employment dates, salary
and diplomas received.
Once all of the information is obtained, it is up to the
discretion of the hiring party to decide if the applicant is
qualified for employment. A negative incident does not necessarily
disqualify a potential employee, but the employer will be armed
with all of the information necessary to make an informed
Professionals in the pre-employment screening industry realize
that mandated checks are likely to be met with skepticism and
anger, but you should view them as a blessing for your business.
Remember, your liability and personal injury insurance can cover
any damages. What it cannot recover is your reputation. The last
thing that any company needs is negative publicity from the media
or through word of mouth. Conducting a background check does not
guarantee that such incidents will not occur. However, it can limit
the risks inherent in owning a business.
Nick Fishman is vice president of sales and marketing for
Cleveland-based Background Information Services Inc. He may be
reached by e-mail at email@example.com.
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