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Fiserv enhances market approach and launches new brand identity

National Mortgage Professional
Feb 23, 2009

Mortgage servicers using income verification in loan modifications see reduced foreclosure ratesMortgagePress.commortgage servicers, loan modifications, foreclosures, borrower verifications, Rapid Reporting, mari Loan servicers are incorporating more borrower verifications, such as those validating income and employment, into the evaluation process when considering borrowers for loan modificationsthat's according to Rapid Reporting, an award-winning innovator of income and identity verification products to the mortgage industry. Until recently, loan servicers have largely relied on information compiled in loan origination when evaluating borrowers for loan modifications. Verifying income and employment reflects the servicing industrys move toward more thorough underwriting standards as the industry struggles to correct itself amidst the current foreclosure crisis. "We've seen a significant increase in loan servicers that are signing up for income verification for loan modifications, which represents a big change as servicers had previously not been involved with borrower qualifications," says Jay Meadows, chief executive officer of Rapid Reporting. "This indicates that the servicing industry is learning from industry problems and making definitive changes to proactively ensure higher quality loans. According to the Federal Bureau of Investigation, there is a strong correlation between mortgage fraud and loans that result in default or foreclosure, so it only makes sense to verify borrower information on loans in delinquency to insure that the modified terms fit the borrowers capacity to repay the loan." These loan servicerswhich include some of the industry's most prominent institutionsare now mandating that borrowers sign an IRS form 4506-T, a consent form that allows the organization to request a transcript of the borrower's tax return from the Internal Revenue Service, before they will further consider the borrower for a loan modification. Unlike in the past when mortgage companies often secured consent forms but never used them, these mortgage servicers are utilizing that authorization to acquire definitive answers on the borrower's income, straight from the IRS, through the use of income verification tools such as Rapid Reporting's IncomeChek. "Without verifying the borrower's income, loan servicers can never be certain that the payment terms of the loan modification are realistic," says Meadows. "By securing definitive answers, loan servicers gain the confidence that the loan modification is a viable solution, rather than a futile attempt that will bring out a bigger problem later down the road." Despite the industry's tougher lending guidelines, mortgage fraud is showing no signs of slowing down. According to the Mortgage Asset Research Institute's (MARI) most recent quarterly report issued in December 2008, incidents of mortgage fraud increased by 45 percent in the second quarter of 2008, when compared to the same period in 2007. This represents a 3 percent increase over the previous quarter, which showed a 42 percent increase over the same period in 2007. "Across the board, organizations large and small, public and private, are realizing that loans which verify income through IRS tax transcripts are far less likely to result in foreclosurethat includes new originations as well as loan modifications," says Meadows. "The loan servicers that use income verification in their loan modification programs have been recognized by regulatory agencies for implementing sound practices that further mitigate risk. Numerous industry sources report that loan modifications that did not include verification of borrower income fail at a higher rate and end up in foreclosure more frequently. Were very pleased to be helping mortgage companies of all types in establishing a system of quality in their practices." For more information, visit
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